CoverNote December Issue 2014

REVIEW OF FINANCIAL ADVISERS ACT PUTS MORE PRESSURE ON RFAS

December 2014

The professionals’ magazine from IBANZ

PLAUDITS FOR INDUSTRY HEAVYWEIGHTS www.ibanz.co.nz

How to make your business 1% better every day

Bad's not going anywhere.

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Advertising/Editorial: Robert Johnson, Benefitz Telephone 09 477 4702, Mobile 027 4970 712, Email: robert@benefitz.co.nz Design/Production: Anne Vindriis, Benefitz Imaging: CTP by Benefitz Produced for IBANZ by: Benefitz, Cnr Constellation Drive & Parkway Drive, Mairangi Bay, North Shore City.

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Telephone 09 477 4700, Fax 09 477 4799 Advertising Deadlines: Bookings 10th of the month prior to publication, Material 15th of the month prior to publication.

CoverNote is the official publication of IBANZ and is distributed FREE on a quarterly basis (March, June, September, December) to members throughout New Zealand and associated companies.

Additional copies are available at a cost of $7.50 per copy, or 12 month (4 issue) subscriptions at $30.00, inclusive of postage and packaging. The articles or opinions featured within this magazine are not necessarily the opinions of the publishers or IBANZ, and they do not accept responsibility for the content of articles featured within the publication. No part of this publication may be reproduced without the written permission of the publisher. The publishers do not accept responsibility for loss or damage to unsolicited photographs or manuscripts.

IBANZ enquiries should be made to: Gary Young, Chief Executive, IBANZ. Email: gary@ibanz.co.nz IBANZ National Office located at: Level 5, 280 Queen Street, Auckland (P.O. Box 7053, Wellesley Street) Telephone 09-306-1732.

Website: www.ibanz.co.nz

Gary Young CEO, IBANZ

Let's make sure regulation serves a purpose As the end of the year approaches it is normal for us to look toward the next 12 months and ask: What can we expect to dominate our professional lives? Our forum in October provided an early opportunity to do this and extended the view beyond just 2015.

Entitled “Catch the Next Wave”, the forum sought to provide delegates with an understanding of their future working environment. Predictably the one certainty is that change will be a constant throughout this period. In this edition of Covernote we look at a number of the issues raised during the forum.

One issue that will clearly dominate the immediate future is a planned review of the legislation governing the role of insurance brokers. Although our sector of financial services does not appear to have any problems requiring the attention of the legislators they will still be looking.

The fear is of course that the all too common phenomenon of regulatory creep will occur and bring with it increased compliance costs. Let’s be clear, IBANZ as a professional association is not opposed to a regulatory environment. Our role is to set and maintain professional standards and regulation can help define what that means provided the settings are correct.

As professionals we would agree that the bar needs to be set high enough to, in the words of the legislation, promote the sound and efficient delivery of financial adviser and broking services, and to encourage public confidence in the professionalism and integrity of financial advisers.

Looking at where IBANZ has gone in recent years, we can see that where appropriate our direction is aligned to that of the regulators. Our code is an adaption of their code but within the context of general insurance broking. We encourage all members to meet levels of professional development that are the equal of the official code requirements.

More than any other sector of financial services our professional skills and the quality of advice has been put to the test since the regulatory environment was introduced.

Under intense scrutiny following a major disaster, our members have demonstrated their value. They have shown the value an adviser can bring when operating in an environment with the correct, relevant level of professional standards.

The challenge we face in the next 18 months will be to resist an increase in compliance that achieves no added value for the end consumer. Our members, by belonging to IBANZ, have demonstrated they are committed to professionalism. The outcomes we have seen under testing conditions show we have the balance about right.

We are meeting the aims of the legislation and doing it in a cost-efficient way for New Zealanders. Our hope is that those who come looking next year acknowledge our achievements and avoid change for change's sake.

Gary Young, CEO, IBANZ

Features 8. What's your number?

Why knowing your product recall risk starts with knowing your exposure.

12. Plaudits for industry heavyweights

36. Making your business 1% better everyday How achieving mini-goals every day can transform your business and your results.

Vero takes top insurer prize and hard-working broker recognised.

16. Change is the only constant 22. Demands on brokers increase

Businesses want more than just a risk adviser, study shows.

24. ICNZ outlines hazards plan 30. Insurance firm gets frank 34. Regulation under review 38. Time to get social

How social is your business?

40. Selling business gives adviser more client face-time 44. Recordkeeping and disclosure

A reminder of the importane of keeping records and file notes.

Regulars 1. View from the CEO’s chair 3.

News 18-21. Out & About 26. Ask an Expert

48. Professional Development: Professional IQ College 52. IBANZ Contacts

46. Insurance needs to boost agility.

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NEWS

Wellington premiums double Commercial properties in Wellington now cost twice as much to insure as they did in 2010, the Property Council says.

It has released its latest Operating Expenses Bechmarks, which show insurance premiums for commercial properties in Wellington’s CBD have more than doubled over the past four years.

The benchmarks are based on a survey of 96 office buildings and 29 shopping centres with a total rentable floor area of more than 1.3 million square metres.

They are now a median $22.11 per square metre per year to insure, 175% higher than Auckland’s median rate of $8.05 per square metre.

Wellington’s rate was $9.63 in 2010.

Property Council Wellington Branch President Mike Cole said

Wellington properties had faced huge insurance rate rises since the Canterbury Earthquakes.

“Wellington property owners have been hit hard by insurance. We are seeing rates returning to pre-earthquake levels for modern buildings, but insurance is still an issue for older building stock,” he said.

“There is clear evidence that rates peaked in 2013.While those huge rates are starting to reduce, many older buildings still face rates that are tens of thousands more than pre-earthquake levels.”

Despite the higher insurance premiums, operating costs in Wellington are on a par with Auckland because Auckland’s operating costs are higher.

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NEWS

Brokers urged to embrace technology Brokers are being told they need to be more proactive to take advantage of the industry’s technological advances.

QBE general manager Ross Chapman told an executive panel discussing industry issues at the IBANZ Forum that insurers had done a lot of work on the digital delivery of products and services to brokers.

“We’ve done a lot of work in this area in the last couple of years, we put in our Zip products 18 months ago. A broker can go into their own system, get a quote online, get the documents online and email it to their client and do it in a paperless way if they wish,” Chapman said. “So we’re already there doing that and it is easy and it is quick but the thing that surprises me is the lack of take-up.”

Some brokers saw the benefit of the digital solutions available but most had not yet changed the way they did business to make the most of it, he said.

Chapman said it was likely that QBE would put pressure on at some stage. “We find there is a reluctance but you’ve got businesses too so you need to invest in your business.”

IAG chief executive Jacki Johnson said brokers should think about how they used digital technology in a way that gave access and usability of data to make decisions and help customers make decision.

Crombie Lockwood chief executive Carl O’Shea said the technology was not complicated. “The issue is, if you think about it for three or four years’, in three or four years’ time, the technology has moved so much you’re never going to get there. So our strategy is to break it down into bite-sized pieces, do everything we can quickly and just actually start to catch up with the rest of the world.”

QBE tweaks general liability product

Brokers 'will have to disclose fees' Disclosure of insurance broker fees is probably inevitable, says Crombie Lockwood chief executive Carl O’Shea.

But he told the IBANZ Forum that it was a much wider issue than that.

“Brokers charging fees that are inappropriate is unacceptable for our customers but my desire is that as an industry we sort that out internally rather than get that into the public forum, which is going to diminish the good reputation we’re starting to build.”

Insurers could take the lead, he said, and tell brokers they would not deal with those they saw behaving inappropriately.

Insurer and reinsurer costs should also be detailed if broker fees were being laid bare, he said. “If we had true transparency of cost around the inbuilt costs of reinsurance, it may make it easier for us to explain to our clients why premiums fluctuate so greatly.”

IAG chief executive Jacki Johnson said brokers should not be afraid of charging fees. “This market really trusts the advice model and the broker model so you can continue to build the value in that and not be ashamed of it, which is why I can’t understand why there is so much fear of it, if you’re delivering the value, people will pay for it.”

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December 2014

QBE says an update to its general liability policy was designed to remove any grey areas.

“QBE has listened to brokers, analysed the cover most called for across a range of occupations and integrated many of the enhanced features previously only available in negotiated broker wordings,” the insurer said.

The general liability product now covers defective workmanship and includes new extensions for advertising liability, contractors and subcontractors as additional insureds, goods on hook, innkeepers’ liability, lost and stolen keys and warrants of fitness.

Spokeswoman Val Graham said the defective workmanship cover was particularly noteworthy.

Businesses involved in manufacture, trades, construction, installation, service or repair had often suffered a gap in their general liability protection, with damage to third-party property that was being worked on traditionally being excluded regardless of whether that damage was caused by an accident or poor workmanship, she said.

QBE’s product now covers both.

The defective workmanship inclusion will cover the cost of repairing or replacing third-party property that was worked on by the insured up to $100,000.

Graham said it had always been a bit of a grey area. “When things got to the claims stage it wasn’t always clear whether it was on one side or the other. We decided it would be cleared up by accepting faulting workmanship as part of the policy wording. It’s basically been tidied up, it’s a real benefit to have that clarity.”

The policy still contains an overarching exclusion relating to leaky buildings.

She said the policy would be of particular interest to businesses involved in construction, manufacturing or service and repair.

The new advertising liability automatic extension covers liability arising from defamation, copyright infringement, misappropriation of advertising ideas, invasion of privacy and unfair competition, up to a sub-limit of $1 million.

NEWS

Insurance Advisernet expands Recent signings by Insurance Advisernet have got the market buzzing.

“We have spent a lot of 2014 restructuring our services and IT platform and are poised for growth,” says David Crawford, chief executive in New Zealand. “We have a unique value proposition in NZ which suits younger or progressive brokers. With five new members joining recently, 2015 is shaping up to be a great year. We have a number of initiatives planned that will greatly assist new start up brokers and those wanting to grow their business.”

New signings include Dan Donaldson from Crombie Lockwood, Advicefirst (Auckland, Hamilton, Wellington, Christchurch), Insite Insurance (Auckland), Capital Insurance (Wellington) and Assured Group (Nelson).

“By the time everyone reads this issue a number of our key brokers will have come back from our annual Advisernet Conference in Australia which complements our NZ conference very well.With over 450 attendees, most of them under 40, it is a fun event as well as very informative with great speakers.”

Get set for regulation Brokers are being warned that the Financial Markets Conduct Act will lead to stricter enforcement of industry standards.

DLA Phillips Fox partner Sue Brown, formerly of the Financial Markets Authority (FMA), told delegates at this year’s IBANZ Forum that the FMA would likely crack down on fair conduct and dealing standards outlined in the FMCA. Under those standards, brokers are required not to engage in misleading or deceptive conduct, or make unsubstantiated representations. Even if something is true, if you cannot prove it, you cannot say it.

Brown said the obligations were not new and were the core standards of the Financial Advisers Act. But she said what was new was that the FMA would be enforcing them.

“Don’t be lulled into a false sense of security by thinking ‘I recognise those standards, I already comply with them’ because the FMA is going to start holding you to those standards in relation to your business,” Brown said.

But she said the FMA had assured market participants that those who wanted to get it right would be given support to do so.

“The FMA has a whole new style and approach and it’s not like any other regulator of my acquaintance. Some market participants in conversations I’ve had have asked to be regulated by the FMA rather than by another regulator because they find the transparency much more helpful and the more mature and commercial approach more helpful.”

IBANZ was to be commended for adopting professional conduct for advisers into its own code of conduct, Brown said.

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NEWS

Brokers underinsured Many insurance advisers do not have adequate insurance themselves, this year’s IBANZ Forum was told.

Christchurch QC Tom Weston said many brokers had unrealistic levels of insurance against exposure to their clients and it was something that needed to be reviewed.

He said many brokers had very low levels of insurance. “[It] seems deeply ironic that you’re in a risk business but you don’t really look after your own risk particularly well.The risk is you might have a very disgruntled client who’s determined to take you out in any event and in that case inadequate personal insurance can be a disaster.”

He said brokers were vulnerable if they breached a contract with a client or acted negligently or below the standard of a reasonable broker.Their relationships could be subject to the Fair Trading Act so they could be found liable if they acted in a misleading way.

Weston said using a corporate structure did not provide extra security. “The court may take the view that your corporate structure is just a front for you personally and you may be found personally liable.

That has happened in relation to the leaky house litigation where builders have been found personally liable even though they have provided their services through corporate structures.”

Cover should be proportionate to the business that was being written,Weston said, and brokers could protect themselves by limiting their liability in their client contracts such as by capping the amount of fees or commissions received.

Strong relationships with clients were the best insurance, he said.

Apex plans to take on NZ A broking business that has its eyes set on expansion says there’s no reason New Zealand companies should accept the future is being bought by a big Australian operator.

Apex Insurance managing director James McGhie wants partners around the country to help grow the business.

He said he had a strong presence in Auckland and wanted to replicate that around the country.

Other businesses that wanted to partner with Apex would get the benefit of the use of the company’s infrastructure, reputation and client channels while maintaining more independence than they would if they sold to a big corporate.

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December 2014

McGhie said he was looking for partners with a “go for it” attitude who could act with professionalism and integrity.

He said he wanted to go against the trend of Australian firms buying out independent operators in New Zealand. “We believe we’re a global business with an office in Auckland.

"There’s no reason why we can’t build up a brand throughout New Zealand and expand into Australia, reversing the trend we’re seeing in New Zealand.

"We’ve never been told we can’t and if we were, we wouldn’t believe it anyway.”

What Apex was doing with product

development and its work for clients was different to what was happening in most of the market, McGhie said, where brokers were becoming more like agents for specific insurers.

He said there were still a lot of strong opportunities for broker business.

“If you have a good story, know who you are and what you want to be and want to make a difference, there are plenty of opportunities.

"So many people are lazy and think because that’s the way something was in the past, it’s how it has to continue to be. We want to challenge that.”

Rapid Growth for PSC Connect A few months into its 3rd year after setting up in New Zealand PSC Connect National Manger, Dave Penfold is delighted with progress so far and excited about new initiatives that are planned for the next 12 months and beyond.

With 18 brokers that are members of PSC Connect throughout NZ and an experienced industry employee, Garmaine Esera, assisting him in supporting these brokers PSC Connect expect to increase their network to at least 30 in 2015. “There are a number of interested parties talking to us because they want to join a top quality international broking group” Penfold says.

The PSC Insurance Group is one of the largest members of Steadfast and now that Steadfast have a strong presence in New Zealand this will provide big benefits for PSC Connect and their member brokers. “There will be significant IT and product benefits that we’ll be rolling out next year which will offer substantial savings in time and cost for transacting business through our operating system, IBAIS and our DMS system” One of the key benefits and points of difference PSC Connect are providing is the market influence they have and technical support which provides significant benefits for their member brokers in winning business and finding a home for difficult to place risks. “Our brokers all provide top quality service and have strong relationships but their clients also need to have comfort that they have access to the all the markets they need and that they have influence and leverage with insurers and suppliers”. This is where PSC Connect really excel and their brokers agree :-

“From my experience it is great being a member broker of PSC Connect as the support and infrastructure provided by the group is second to none! I have worked closely with Dave and the team on a major account and it paid off, thanks for the support” – Jo Kiro from Kiro Management Ltd.

“Dave, backed by the reputation of PSC Connect was great on a high net worth client, Dave provided technical support through the whole process, from initial client meeting through to urgent placement late on a Friday night! Dave allowed autonomy but was always at hand when required and ensured the process ran smoothly. PSC Connect has a presence that makes insurers & clients take notice and it is nice knowing they have our back” – Laura McMahon from Haven General Ltd

“There are so many complex components with starting and running a business especially in year one and because I knew I would be as busy as I have ever been in my career working both in and on the business, I really wanted to align myself with a trusted and reliable “cluster group”. Looking back on my first year in business, I am glad I became a member broker of PSC Connect as they have provided me with valuable tools, support and reliable service to enable me to focus on my business daily. One of the key features to PSC Connect’s offering is their global reach and leverage they have with both local and offshore markets. If you are looking for robust support and service with your business then you need to be talking to Dave Penfold at PSC Connect” - Sa Luatua from The Commercial Shop

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7

FEATURE

WHAT'S YOUR NUMBER? Why knowing your product recall risk starts with knowing your exposure.

FEATURE

M

aintaining food safety standards and managing recall risk are two increasingly pressing issues for New Zealand companies.

As international supply chains continue to expand in complexity, companies are exposed to greater risk, increasing the likelihood of a product contamination. Indeed, the number and magnitude of product recalls around the world has increased significantly in recent years, and New Zealand is not immune.

There is now an average of five recall incidents in the food and beverage industry reported every month in Australasia. Two or three of those occur in New Zealand.

This increase, combined with a broader reach of media and social media, has led to much greater awareness of recall events and a greater potential risk to company reputations as a result.

Regulation is also catching up – the new Food Act 2014 gives the government more power to intervene in product recall and food safety incidents, potentially taking

away the ability for the affected company to control the situation.

But while product recalls are becoming larger and more frequent, most food and beverage companies are unaware of the magnitude of their recall risk. A big part of this problem has been the lack of reliable data and a credible methodology to estimate the financial impact of a product contamination.

While product contaminations occur frequently, companies rarely disclose the real cost of contamination incidents, so benchmarking in the past has been very limited.This issue is not specific to New Zealand, and affects food and beverage companies worldwide.

In response to this problem, AIG created NOVI, a free and confidential service that enables businesses to better understand their product recall risk exposure by estimating the probable maximum loss from a recall event.

When designing NOVI, AIG drew from more than 25 years of insight

WHILE PRODUCT CONTAMINATIONS OCCUR FREQUENTLY, COMPANIES RARELY DISCLOSE THE REAL COST OF CONTAMINATION INCIDENTS, SO BENCHMARKING IN THE PAST HAS BEEN DIFFICULT. and information gained from working with food and beverage manufacturers worldwide – including extensive analysis of thousands of recall incidents – as well as input from worldleading food safety consulting companies.

The result is a proprietary methodology that uses more than 80 data points and considers the value of the contaminated products, recall expenses, destruction costs and lost profit associated with the contaminated products.

NOVI’s contribution to the food and beverage industry has been recognised with a highly commended prize in the 2014 NZ Innovators Awards.

By knowing their “worst-case scenario”, companies can focus the development of Continues overleaf…

FEATURE

…Continued

their safety programmes and procedures, and ultimately make more informed decisions on how to protect their balance sheet, their supply chains, and their customers. NOVI helps companies to identify their areas of risk and the associated cost, providing insight into where companies can mitigate or even eliminate some areas of exposure.

AIG’s casualty manager, Ron Curin, said: “We can liken the use of NOVI to taking your blood pressure. If you take your blood pressure and find that it is high, you may go to the doctor and be given medicine. But you may also change your lifestyle by eating differently and doing things differently in general. In this way, NOVI is a true risk management tool – by providing an estimate of the financial exposure resulting from the product recall, NOVI can enable companies to find a solution to the issue before they face it. The solution will vary from company to company and will be multifaceted.”

A comprehensive product recall insurance

policy would be part of this solution for most companies, Curin said, and NOVI also allowed companies to determine how much of their exposure was retained on the balance sheet versus the risk transferred via insurance, and whether this needs to be rebalanced.

“With a better understanding of their product recall exposure, companies can have increased confidence in discussing their insurance requirements with their broker.

Similarly, insurance brokers and risk managers are able to better advise their food and beverage clients on appropriate insurance solutions, knowing that they understand the financial exposure at risk.”

Since its launch in April 2014, NOVI’s New Zealand website has received visits from more than 360 New Zealand companies looking to learn their financial exposure in the event of a product recall caused by an accidental product contamination. Worldwide, more than 244,000 companies have used NOVI to help manage their product recall risk.

NOVI, AIG’s product recall cost estimation tool, has been awarded the “highly commended” prize at the New Zealand Innovators Awards 2014 for Innovation in Financial and Professional Services.

Senior underwriter Suzanne Brown, who accepted the award with casualty manager Ron Curin said she hoped the award would bring further awareness to the service, which aimed to assist food and beverage manufacturers in reducing their risk of a product recall.

“One of the major issues faced by food and beverage manufacturers when trying to estimate their exposure has been the lack of reliable data. NOVI draws from AIG’s experience of working with food and beverage manufacturers worldwide for more than 25 years and includes data from thousands of recall incidents,” Brown said.

FEATURE

ISO offers adviser advice Insurance advisers’ clients are being told to keep all their documents, read them carefully and always ask questions.

The Insurance and Savings Ombudsman has put out a fact sheet about financial advisers.

Ombudsman Karen Stevens said: “Most complaints about financial advisers could be avoided if there was more direct discussion between advisers and their clients about the details. Financial advisers include mortgage and insurance brokers, financial planners, and people working for insurance companies who give advice. Complaints tend to be about the quality of advice, misunderstandings, fees and charges.”

She said clients should provide full, accurate information to their advisers, keep all documentation and read it, ask advisers about their fees and charges, ask their advisers to explain how each product worked and keep asking questions until they fully understood.

The ISO fact sheet said advisers might help clients fill out an insurance application form but it was their responsibility to make sure the information was correct.

“If the information is not correct, when you make a claim it could be declined or your whole policy cancelled. If your adviser is completing the application form for you, take the form away and re-read it to make sure you have provided all the required information. If you are not happy with it, add more information or complete a new form yourself. If you remember information after the form has been sent in, contact the insurer directly or ask your adviser to provide the

insurer with the correct information. Always send this information in writing.”

It said even if the insurer later said there was a problem and the adviser had filled out the application, generally the client would have signed the form confirming the information was correct. “Therefore, normally ou are responsible. If you have questions or concerns about your insurance, speak to your adviser or the insurance company directly, and ask for advice in writing.”

Last year the ISO Scheme dealt with the highest number of complaints since 1998, with 3215 complaint enquiries and 300 complaint investigations about insurance and financial services. Only 2% of complaint enquiries and complaints were about Financial Advisers.

MOST COMPLAINTS ABOUT FINANCIAL ADVISERS COULD BE AVOIDED IF THERE WAS MORE DIRECT DISCUSSION BETWEEN ADVISERS AND THEIR CLIENTS ABOUT THE DETAILS.

www.covernotemag.co.nz

11

COVER STORY

PLAUDITS FOR INDUSTRY HEAVYWEIGHTS Vero takes top insurer prize and hard-working broker recognised.

I

BANZ’s annual survey has highlighted the ways insurers are working well with brokers and areas that could still benefit from further attention.

A poll of 775 brokers and other insurance professionals was conducted through September to award the Most Valued Insurer prize for 2014.

Vero took the gong, which was announced at this year’s IBANZ Forum.

Almost 40% of brokers regularly used all four major insurers – Vero, NZI, Lumley and QBE - and two-thirds used at least three of the companies. Ninety-seven per cent of brokers used Vero, 92% NZI, 87% Lumley and 76% QBE. Sixty-two per cent used AIG, 57%

12

December 2014

Zurich, 43% ACE and 38% Allianz. But just 11% of business was being placed with small insurers.

David Mustard, a senior consultant at TNS, the research company that conducted the online survey, said it was comprehensive.

About 60% of the respondents were brokers involved in writing insurance policies.The rest were support staff and other management. “It’s quite a substantial survey.”

He said brokers might not realise how valuable their participation in the survey was and the opportunity it presented them to speak directly to insurance companies’ decision-makers.

“They shouldn’t overlook the fact that it is

ALMOST 40% OF BROKERS REGULARLY USED ALL FOUR MAJOR INSURERS - VERO, NZI, LUMLEY AND QBE, TWO-THIRDS USED AT LEAST THREE OF THE COMPANIES.

COVER STORY

really valuable to get their voice heard within senior management groups of each of these companies,” Mustard said.

The survey took about 20 or 30 minutes for each person to complete. “That’s a reasonable investment of time, and makes up about 270 hours of conversation in total that the industry has had with the most senior people in the insurance companies. How else could they get that amount of attention within the senior executive of each company if it weren’t for the survey?”

He said it was the best mechanism most brokers had to let major insurance companies know about things that were a concern to them, how they rated each insurer’s performance and areas that the companies could improve on.

NZI took the prize last year and was secondplace this year. Mustard said the larger insurers tended to perform better than smaller companies.

Industry-wide, insurers had a performance score of seven on a one to ten scale. Mustard said that was reasonably good but not exceptional.

Major insurers had a score of 7.3 and minor insurers recorded 6.6. Last year, the industrywide score was 7.1.

The score is determined on the basis of a set of questions that relate to insurers’ image, reputation, products, associated services, business support and relationship management. There are questions about the prices brokers are charged for insurance and the commission they are paid.

Major brokers performed best on the image and reputation aspect, and least well on prices and commissions. Small insurers rated highest for prices and commissions. IAG and QBE were

THE SURVEY IS THE BEST MECHANISM MOST BROKERS HAVE TO LET MAJOR INSURANCE COMPANIES KNOW ABOUT THINGS THAT WERE OF CONCERN TO THEM, HOW EACH INSURER'S PERFORMANCE AND AREAS THAT THE COMPANIES COULD IMPROVE ON. seen to be more innovative while NZI, Lumley and Vero were positioned on similar attributes relating to service, being easy to work with and being general insurers. Lumley is seen as easy to deal with, NZI is recognised for its community support, QBE for being a specialist and Vero for its service.

“At the end of that, we say ‘considering all these things, how would you rate each company overall and [the scores] are the average of what we get,” Mustard said.

Mustard said if insurers’ scores were compared to banks of similar size, banks scored a bit better, with a performance score of eight. “They’re rated by their customers as performing better than insurers are ranked by brokers.”

He said that showed there was an opportunity for insurance companies to improve their service.

One of the key themes that was highlighted in the survey was brokers’ desire for insurance companies to take a strong leadership position within the industry.

Mustard said brokers were keen to see the big

players step up on issues in the industry such as a perceived reduction in competition. Big mergers such as that of NZI and Lumley and smaller moves to combine broker firms had created concerns.

There were also fears about the potential for natural disasters, and what that might mean for the continued availability of insurance cover in New Zealand.

Other issues identified related to problems attracting and retaining staff as senior people who had been in the industry a long time retired, and concerns that the public perception of the industry had been tarnished by the way Christchurch earthquake claims were handled.

Brokers also wanted attention paid to dayto-day business support.

Mustard said: “A raft of things have come up this year that haven’t been there before. I suspect that’s driving increased importance for industry to demonstrate stronger leadership.

Brokers indicate that is an area of importance Continues overleaf…

www.covernotemag.co.nz

13

COVER STORY

…Continued

and the insurers have some way to go to achieve that. “ Another area brokers wanted attention paid to was long-term relationship building between themselves and insurers. That was an area of weakness in 2013 and scored highly as a problem again this year.

“How companies interact and value their business,” Mustard said. “That’s an area that’s been an industry weakness for some time and that all companies could collectively do better at.”

IBANZ chief executive Gary Young agreed there was room for improvement. “Our industry is all about relationships and so it is essential that managing the relationships with their key partners is something that should have a real focus. It did not rate well in last year’s survey and this year has slipped even further.”

Vero chief executive Gary Dransfield said the company was pleased to have been named most valued insurer. The award was accepted

by Cris Knell, recently appointed Vero’s executive general manager, commercial and distribution.

Dransfield said the relationships the company had with intermediaries were crucial to its performance. “That’s a long-term focus for us. We’d like to think we provide excellent support for our intermediary partners.”

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7

December 2014

Dransfield said Vero tried to go out of its way to outperform its competitors when it came to its relationships with advisers. “It’s an area where we traditionally rate strongly.”

The survey was very important to Vero, he said, because such a lot of people responded to it and provided useful feedback. “It’s a really rigorous methodology, statistically it’s really significant… it’s a great way to find out what’s important to brokers.We want to make sure they feel listened to and to be seen to be doing things that are important to them.”

But Dransfield said the company would never claim to be perfect and understood that brokers were seeking more industry leadership. “The feedback is that they want us to take an even stronger industry leadership position.”

The fact that banks outperformed insurers in terms of satisfaction could be partly due to the fact that insurance was often seen as a “grudge purchase”, he said.

That could sometimes make things more difficult. “We protect our customers and their customers against the relatively infrequent event of something really bad happening… we deal with negative things happening and that can colour how the industry is perceived by stakeholders and how people think about the service and value industry products.”

Dransfield said the industry needed to get better at communicating the value it provided.

5

9

OUR INDUSTRY IS ALL ABOUT RELATIONSHIPS AND SO IT IS ESSENTIAL THAT MANAGING THE RELATIONSHIPS WITH KEY PARTNERS IS SOMETHING THAT SHOULD HAVE A REAL FOCUS.

10

COVER STORY

M

artin Lines, executive broker at Crombie Lockwood in Napier, says winning the top broker prize was a surprise.

The Outstanding Broking Professional award was handed out at this year’s IBANZ Forum.

Instead of brokers nominating themselves for the prize, IBANZ has moved to a system where insurers choose the top brokers.

IBANZ approached all the insurers in New Zealand, asking them to nominate the people they thought deserved the award.

Twenty-three brokers from a range of companies across the country were nominated.

Insurers rated each nominee against six key criteria: Professional approach in business relationships, quality of submissions to insurers, knowledge – industry, technical, regulatory, professional standards, acting ethically and with integrity, communication, relationship

skills and contribution to the industry.

The other two finalists were Paul McKay of Auckland and Paul Goffin on Invercargill.

Lines said he had been surprised to even be in the running. “I knew they were doing something and I knew there was an award but I didn’t think I would be in the running. It was a nice surprise, I was absolutely rapt.”

He said clients would be told about the prize. “It’s something a bit different. It’s something we will promote.”

Lines started his insurance career in 1983 as an office junior with National Insurance.

He joined Crombie Stephens, now Crombie Lockwood, in 1987 as a commercial broker and became second-in-charge in New Plymouth after seven years. He returned to Napier in 1999 as branch director before relinquishing the role last year to focus on broking.

Lines was IBANZ Young Broker of the Year

in 2000.

An insurer said: “Quite simply the time that Martin spends at the office dedicating to his customers is unreal. His absolute professional approach to all things insurance, his calm manner, non-accusatory style and absolute integrity, makes him a leader and a person that people can and should emulate.”

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15

FEATURE

Change is the only constant B

BE NIMBLE AND TAKE CONTROL OF YOUR FUTURE BEFORE IT TAKES CONTROL OF YOU.

16

December 2014

e nimble and take control of your future before it takes control of you, Crombie Lockwood chief executive, Carl O’Shea told brokers attending the IBANZ Catch the Next Wave forum in Auckland.

O’Shea was one of five key players speaking during a hour panel session designed to help brokers gain a sense of the future operating environment direct from industry leaders.

The panel featured Ross Chapman, general manager at QBE Insurance, Jasmine Christie, general manager at Aon Benfield, Jacki Johnson, CEO at IAG (NZI), Cris Knell, executive general manager at Vero and O’Shea.

The wide-ranging session saw the panellists discussing the future operating environment for brokers and one recurring theme was that in today’s world, change is the only constant.

Knell pointed to the challenges the industry faced as it worked in an environment that was changing quickly with a more savvy, educated customer base and a more savvy, educated employee base.

“The key, as an industry, is to make sure we are agile and can change with these trends as they emerge.”

He saw new technology as an enabler to engage with customers. For brokers it was a matter of maintaining the centre and being part of the play and he said that brokers had a bigger role when things were complicated. If a buyer has a straight forward purchase, they go online “but when risk is more complicated people go to a broker”.

Provided brokers could ensure value across the product, processes and provide service excellence, that client base would be loyal.

Chapman of QBE pointed to the cost of doing business, the use of technology, pricing, reputation and regulation.

“New Zealand is a mature market and if an insurer wants to grow they have to take business off someone else. Price is the blunt instrument,” he said.

The question was how to take the cost out of doing business when the pressure was on pricing.

QBE had set up a wholly-owned Philippines global shared service centre to do all the back office functions for better and more consistent service and “underwriters can get out and spend more time with you guys”.

Chapman also saw the use of technology as one way of keeping costs down. But despite this the reluctance from some brokers to take

advantage of it was disappointing.

“If you think people will continue to buy insurance the way they have done in the past, you are mistaken,” he said.

Johnson noted that New Zealand was number three in terms of natural perils and future success would relate to how the industry stayed relevant to the customer in the digital age and in light of climate change issues.

“How do we understand the evolving risks and how products are designed,” she asked.

“How does the industry appeal to its emerging workforce and remain relevant to the people coming through?”

On the digital front the industry had the opportunity to be the “most relevant ever”.

“It’s not about technology, it’s about the communication – how are we staying relevant to the businesses being insured?”

Christie said the reinsurance industry had a lot of challenges ahead and reinsurers were responding to these as the environment the industry operated in changed.

She pointed to urbanisation citing a PriceWaterhouseCoopers 2025 report that said 70% of people in China would be living in cities of more than one million people.

Another challenge was the world’s changing demographics as the population aged.

“What do clients want? More people will be living past 65 – what do they value?” she asked.

Christie also highlighted that risk was becoming a lot more complex.

“This industry has been around for a very long time but risk is changing and the key is to understand risks and recognise the connectedness… Risk will become more uncertain and we need to be comfortable with that.”

O’Shea said he did not believe the industry could commoditise advice. “Knowledge is your point of difference.”

He saw more and faster change ahead, a rapid rise in technology and more consumer choice.

“My advice is to be nimble and take control of your future before it takes control of you.”

O’Shea said that while aggregators had taken hold in the UK and Australia he did not think it would be relevant in New Zealand as there needed to be three to four major insurers who wanted to do it.

“We can’t commoditise advice – it devalues what everybody in this room does.”

FEATURE

www.covernotemag.co.nz

17

OUT AND ABOUT

18

December 2014

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OUT AND ABOUT

Training the next generation of All Blacks Brokers and AIG staff have had the chance to brush up their ballhandling skills with some of the country’s best rugby players.

The event, held in September, saw six All Blacks and four Black Ferns turn up to the event at College Rifles Rugby Club in Auckland.

All Blacks Kieran Read, Beauden Barrett, Steven Luatua, Charlia Piutau, Brodie Retallick and Tawera Kerr-Barlow joined Black Ferns Kelly Brazier, Renee Wickliffe, Portia Woodman and Alex Tapsell on the field.

It was the last engagement for the All Blacks before they flew out to Argentina and then on to South Africa for the end of the 2014 Investec Rugby Championship.

About 200 guests joined in the fun, starting with a lighthearted Q&A with questions from the audience, followed by an opportunity for autographs. The event then moved outside with the players leading agility, passing, kicking and tackling skills sessions for the children.

AIG New Zealand’s acting general manager Debbie Wilson said the event was a huge success.

“We wanted to give our key brokers the opportunity to socialise with AIG in an environment that is quite different from the usual corporate hospitality and to create a fun and memorable experience that they could share with their families.”

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December 2014

OUT AND ABOUT

www.covernotemag.co.nz

21

FEATURE

DEMANDS ON BROKERS INCREASE Businesses want more than just a risk adviser, study shows.

I

f brokers want to remain relevant, they may need to broaden what they offer, a new study says.

An international report by PwC has found that insurance brokers’ business models may soon need to change.

The report: Broking 2020: Leading from the front in a new era of risk draws on surveys from risk buyers in multinational organisations.

It found many organisations thought the increasingly challenging risk environment could no longer be managed through traditional approaches.

Instead, they were looking to engage a wider set of advisers to get the specialty advice they needed.

The survey showed while chief financial officers and risk managers continued to rely on brokers as their main information source when placing risk, they did not always view brokers as the ones to develop solutions for their risk concerns.

Less than half of those surveyed identified brokers as a solutions provider.

That was particularly true for emerging risks such as cyber security, data and supply chain risks, where risk managers said they would look primarily to industry groups and carriers to develop the solutions for these risks.

PwC’s New Zealand insurance sector leader David Lamb said that offered New Zealand insurance brokers an opportunity as well as a challenge.

“The world we’re living in is moving fast and there are new emerging non-traditional risks, such as cyber or supply chain. If you look across New Zealand, there are a lot of small businesses and like everyone else, there are risks for them – who do they turn to?”

He said those businesses’ brokers would traditionally look at their risks and identify the coverage requirement but clients were now tending to want more than just cover.

“They want guidance and advice. If brokers can get up the knowledge curve, that’s an advisory revenue stream they might not be getting at the moment. They can take the trusted adviser theme to the next level,” Lamb said.

The core need to manage risk was not gone, Lamb said. But advisers could add value with additional knowledge and assistance. “They can add most value by having a good understanding of the characteristics of a client’s business, what’s most valued and what’s going on in that individual business. The adviser can be a sounding board on insurance matters and other matters. Brokers that do that best will be the ones that are most sought after.”

Lamb said the bar was quickly rising for the broking industry. Client expectations were changing at a rapid pace and clients were looking for partners who had the skills to both identify, as well as develop, solutions for the new risk landscape.

“Brokers may be a client’s first choice to take on an expanded risk facilitation role but they also have other choices open to them with a growing demand for risk advice and other advisers keen to step into this risk partnership role. If some market players don’t adapt their businesses to what their clients want they’ll face increasing competition for new business.

This may require a shift in some brokers’ approaches from hindsight to foresight as they evolve from being placers of coverage to preventative risk managers and advisers.”

Lamb said the market was at a tipping point.“There are lots of established,

22

December 2014

DIFFERENT CLIENTS WANT DIFFERENT THINGS. BROKERS NEED TO DELIVER IN A WAY THAT MEETS THE CLIENT'S NEEDS. traditional brokers in the market and some younger brokers entering the market who are not so traditional in terms of their background. It’s changing quite quickly. I think the most important thing advisers can do to remain relevant is to really understand their clients’ businesses. What value clients seek – different clients want different things. They need to deliver in a way that meets the client’s needs.”

Advisers should also not be shy about making clear to their clients the value they were adding, he said. “It might be in a subtle or explicit way to help clients recognise what you’re bringing to the table as a trusted adviser.”

PwC’s research showed developing advanced risk and loss analytics and capitalising on big data analysis would be key to strengthening brokers’ position in the market. Risk analysis, developing shared technology between client, brokerage firm and carriers, and loss analytics were identified by survey participants as the top three things brokers could do to assist them on a more efficient basis.

“To achieve growth, brokers will need to look to the emerging risk area. We’re at a crossroads and brokers have a choice – to compete for increasingly commoditised standard risks or lead risk facilitation, which will open up commercial opportunities,” Lamb said.

FEATURE

Plus4 expands into Otago

P

lus4 Insurance Solutions, the national insurance broking and financial adviser group, has announced that two Dunedinbased advisers have joined Plus4, establishing the group’s presence in Otago.

Tim Oliver and Tony Chave are experienced insurance brokers and financial advisers serving the rural sector, SMEs, families and high-networth individuals throughout the Otago region.

Tony Chave is an authorised financial adviser (AFA) and director of Tony Chave Financial Services. He has over 30 years’ experience in the financial services sector, having worked for AMP before establishing his own advisory business earlier this year.

Chave is a member of the Institute of Financial Advisers (IFA) and has had a lifetime involvement with Otago rugby.

Oliver is also an AFA and has been working as a financial planner in Dunedin for the past eight years, after living and working in South

Africa and Australia.

He established his own business, Oliver Financial Planning, in 2013 and is a member of the Professional Advisers Association (PAA).

Plus4’s Chairman Grant Uridge said: “Tim and Tony are experienced and highly regarded Otago advisers. They have each established their own successful individual businesses, predominantly serving the needs of the rural

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sector, businesses and families. Given that Plus4 is a co-operative, the only specialist insurance and financial broking firm who is a member of the NZ Cooperatives Association, we are very selective about whom we ask to join our group. Our members need to not only have the necessary experience and expertise but also share our values, as each member has an equal shareholding. We are pleased to welcome Tim and Tony to Plus4.”

Established in 2008 in Nelson, Plus4 now has over 30 advisers working from 12 locations between Whangarei and Invercargill. Group members, who have no affiliations to any specific insurance provider, offer unbiased advice tailored to their individual and business clients’ requirements.

They work predominantly with small to medium sized enterprises, their owners and their accountants.

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23

FEATURE

ICNZ HAZARDS PLAN N

ew Zealand’s Insurance Council is calling for changes to keep insurance affordable and available, in the face of growing natural hazard risk.

It has released a 15-point plan aiming to reduce the social and economic impact of natural hazards.

Chief executive Tim Grafton said New Zealand could expect to face, on average, annual costs of $1.6 billion from natural disasters. “Without risk reduction measures the cost from natural disasters will increase,” he said.

The past two years were among the most expensive for weather-related events in New Zealand. About three-quarters of the $40 billion cost of the Canterbury earthquakes will be met by insurance.

The Council is calling on decisionmakers to introduce comprehensive measures to reduce the risk of natural disasters and remove levies from insurance premiums to keep the transfer of risk to insurance affordable.

Among the 15 recommendations, the Insurance Council recommends better central co-ordination of national responses to natural hazard management, amending the Resource Management Act to include the management of natural hazards and listing all natural hazards on property LIM reports.

Grafton said: “We cannot control the forces of nature, but we can reduce their impact significantly by building New Zealand’s capacity to withstand and recover from natural disasters.”

ICNZ said insurance was not a substitute for risk management and did not reduce risk.Poorly-managed risks could push insurance out of the grasp of lower-income households, which would put the burden on to taxpayers, it said. “[Insurance] just transfers risk to the insurer for a price which increases as the risk gets higher or no longer becomes available because the risk gets too high.

While New Zealand enjoys high levels of

24

December 2014

WE CANNOT CONTROL THE FORCES OF NATURE, BUT WE CAN REDUCE THEIR IMPACT SIGNIFICANTLY BY BUILDING NEW ZEALAND'S CAPACITY TO WITHSTAND AND RECOVER FROM NATURAL DISASTERS.

insurance penetration, not everyone takes out cover. Those that don’t take out cover may expect government assistance after an event.”

It said London insurer Lloyds had demonstrated the importance of keeping insurance affordable and available when it calculated that for every 1% increase in insurance penetration there was a 22% decrease in taxpayers’ contribution required post-disaster.

“Well-insured countries can therefore spend less on emergencies, freeing up more money for investment and growth,” the report said. “However, there are limitations on the

ability of insurance to send strong enough signals about mounting risk. A large part of the premium charged for typical house insurance has nothing to do with the risk that property faces. Well over one-third of the cost is the Fire Service Levy and the Earthquake Commission Levy with GST on top of those levies.”

Insurance should be able to signal risks while remaining affordable, the report said, otherwise those on lower incomes in highrisk areas would be the least able to afford insurance and the most likely to suffer in a disaster.

“Insurance on properties is bought annually. This means signalling through the premium price a risk that will grow over many years, can only be done slowly and incrementally. That’s why the emphasis has to be on identifying and reducing or avoiding high risks in the first place. The message that over time those in high risk areas will face higher premiums or withdrawal of cover needs to be maintained to overcome the limits of incremental change from annual renewals. Areas of Christchurch that flooded frequently after the earthquake had flood excesses of up to $10,000 which provides a strong signal about what may happen in future elsewhere unless adaptation measures are undertaken to reduce such risks.”

The report also highlighted the impact of regulatory costs. It said they need to be addressed to ensure they balanced the need to protect policy-holders with the need to avoid pushing up costs.

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ASK AN EXPERT

Carrier Claims QUESTION… My client is a carrier and has a high excess on their Carriers Liability Policy and so tends to settle a lot of small local transit claims themselves. They have asked for advice on the correct basis of settlement to their consignors for small claims. I've been advised that there is no basis of valuation under the COG act however on small claims, most insurers tend to accept the commercial sales invoice from the consignor to the consignee as the correct value to settle the claim even though it includes profit for the consignor as it is not worth investigating. I've also been advised that on a very large consignments, that an insurer will seek to have the seller/consignor specify the actual production costs of their product, and not the sales invoice cost which includes an element of profit for the seller. If XYZ Meat Ltd manufacture pies at a cost of $10,000 but sell those pies to Countdown for $30,000, they would be only entitled to claim under the COG Act for the $10,000 that it cost them to make the pies. Is there any legislation or case law that I can refer to that clarifies this?

REPLY… NEIL BEADLE International rules apply a “sound arrived market value” approach, but the COGA does not expressly say that applies under the Act. The similar approach in accepting the commercial sales invoice from the consignor to the consignee as the claim value is justified by the fact that the COGA provides that even if he is not the contracting party, if the property in the goods has passed to the consignee he can sue for the loss (s20). So his loss would be the commercial cost to him not the cost of production.

In the example you refer to of your pie manufacturer selling pies to the supermarket, it may well be that he is both consignor and consignee and must deliver to the supermarket, which might explain the different result, but on the same principle. That is as far as I can take it in this forum, but I hope that helps.

Overlaying this question is the limitation of carrier's liability applying to each unit of goods which is a separate topic in itself.

REPLY… ANDREW SCRIVENS It is the responsibility of party suing the carrier to prove their loss. This represents the cost of the goods to them. Therefore if it is the manufacturer suing the carrier the cost of the goods to them is the cost of manufacture plus costs incurred at the time of loss (i.e. packing, freight, etc.). If it is the consignee (buyer) suing the carrier then they are able to prove the cost of the goods to them is sales invoice.

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December 2014

REPLY… PAULINE BARRATT So far as a manufacturer or seller is concerned, lost or damaged goods are often replaceable. If the pie manufacturer were to be paid a profit component and then were to resupply the goods, he would end up with twice the profit for a single supply.

Scrivens replies: Just to put Pauline's response in layman speak - the consignee can bring a claim against the carrier as the contracting party if the goods have been delivered. However, I believe that even if the goods have been delivered the consignor (seller / contracting party) can still bring a claim against the carrier instead of the consignee. In practice it is largely up how the consignor responds to the claim, i.e. in most circumstances a buyer will initially approach their seller if goods are received damaged. Some sellers tell their buyer to go to the carrier and some sort their buyer out and then pursue the claim against the carrier. Therefore it largely depends on who first notifies the carrier of the loss or damage. This is also often determined by whether the goods have been paid for or not, i.e. if the seller has been paid then effectively they have not suffered any loss, unless they choose to replace the goods. If the goods have not been paid then the buyer has no incentive to pay for damaged goods and has not suffered any loss so this puts the onus on the seller to pursue the claim against the carrier.

Barratt replies: The consignee can only sue the carrier if property in the goods has passed - "property" in this context meaning title / ownership. Normally title passes at the same time as delivery, but not always - if the seller has contract terms by which it retains title until the goods have been paid for, that won't be the case.

You are right in saying that the consignor is still able to pursue the carrier even if the goods have been delivered and even if they have been paid for. If that happens, the consignor is essentially treated as the agent of the consignee (the party who has suffered the loss) and any payment made by the carrier to the consignor has to be passed on to the consignee.

ASK AN EXPERT

Road Collapse

Problem Plants

QUESTION… My insured owns a large commercial site. The site borders a river and there is a formed road/driveway leading to the main site. A heavy rain event has caused the river to rise rapidly. One of the banks has washed out, leading to the collapse of the formed road into the river. The cause of damage has been agreed as flood leading to washout. A significant amount of land has fallen away. The insured intends to prevent a reccurence of the issue in co-ordination with the council by installing a protective barrier. The road can’t be reinstated without underlying support. The policy excludes land but this does not apply to any road at a site/location owned by the insured. Who should cover the cost to support the collapsed road?

REPLY… PAUL LIGHTFOOT It will depend on the exact wording of the policy, because as you say generally the road is covered but the land underneath isn't. However you can't fix one without the other.

REPLY… JANE MARSICK I also note your reference to a 'formed road'. I think checking the exact policy wording would be useful as a lot of the market excludes site improvements such as roads when they are not of 'permanent construction'. in addition to the exclusion for land you may also find exclusions for driveways made of gravel or shingle, or any kind of fill.

Also, many of the erosion, subsidence and landslip exclusions in the market apply very broadly so that loss arising from any form of landslip might be excluded.

In this case the exact terms of your contract will be very important.

What the exact definitions of insured property are, whether exclusions reference loss to or loss arising from etc etc.

Underwriters never intend to insure land, and a very good case could be made for arguing that a 'formed' road is just land. Substantiating this claim may be an up hill battle.

Redundancy Payments QUESTION… How does a profits policy respond in the event that it is necessary to put off staff following a loss, and this triggers redundancy payments that have to be made in accordance with an employment contract?

REPLY… BRETT FAWCETT If wages are insured the initial peak payment for redundancy off-set / reduces the subsequent savings in wages.

It gets more complex if the redundancy is so much that it completely erodes the savings and more. In this case your client needs to have an additional item for redundancy.

I have written a paper on "The Insurance of Redundancy Pay" that can be accessed from the Cunningham Lindsey NZ website. Click on "Click here to view our technical articles" (bottom left of the homepage). It is under the section "General BI Subjects".

QUESTION… To gain access to a hillside home with $500,000-plus repairs, parts of the owners plants, shrubs and garden need to be removed. The underwriter says the costs of reinstating the plants is not covered as the policy excludes loss of use or consequential loss. I would have thought this would be part and parcel of the repair process and certainly not my understanding of loss of use or consequential loss. The landscaping benefit doesn't come into play as the garden wasn't damaged in the quake.

REPLY… RICHARD HERN Without seeing the policy wording I cannot be definitive. However, I agree that if the removal is required to undertake the reinstatement work, it would appear an intrinsic cost.

REPLY… CROSSLEY GATES Yes, I believe you are on the right track. Your client is not claiming separately under the policy for the damage to the plants, shrubs - rather this is just part of the repair cost to repair the damage your client is claiming for and which the insurer has accepted cover.

If the repairs can only be carried out this way, the cost is just part of the repair cost.

Do you have a question for our experts?

If so, visit iNavigator, www.inavigator.co.nz, or the IBANZ website, www.ibanz.co.nz - and let us know.

www.covernotemag.co.nz

27

FEATURE

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December 2014

FEATURE

A

ustbrokers has bought 100% of New Zealand’s BrokerWeb Management Limited, as well as a 50% in the country’s largest independent broking operation BrokerWeb Risk Services in a deal worth more than $20 million.

BrokerWeb Management has 40 members and BrokerWeb Risk services has six branches.

The transaction signals a major shake-up in the New Zealand insurance broking industry, which has long been considered a duopoly between insurance brokers Aon and Crombie Lockwood.

Austbrokers said it should make the big players nervous.

It is one of the largest transactions undertaken

by Austbrokers Holdings, and was executed through its 80% subsidiary NZ Brokers Holdings Limited.

With the acquisitions combined, Austbrokers Holdings immediately becomes New Zealand’s largest insurance broking cluster network, as well as the largest Australasian-owned insurance broking group in New Zealand, with $350 million gross written premiums (GWP) and over 120,000 clients.

Austbrokers chief executive Mark Searles, said: “It was part of our targeted strategy to use our proven Owner-Driver model as the platform for growth. Overnight, this approach gives Austbrokers Holdings and our New Zealand partners’ significant market scale and leadership.”

He said: “BrokerWeb Risk Services’ business is already closely aligned with our existing operating model, creating great opportunities for expansion”. Additionally, BrokerWeb Management as a leading broking cluster network, is similar to Austbrokers existing joint venture cluster group partnership in Australia, AIMS - creating further natural synergies.

Austbrokers chief broking officer Keith McIvor has taken a 20% interest in NZ Brokers Holdings and has entered an agreement to regulate the governance of NZ Broker Holdings

IT IS ONE OF THE LARGEST TRANSACTIONS UNDERTAKEN BY AUSTBROKERS HOLDINGS, AND WAS EXECUTED THROUGH ITS 80% SUBSIDIARY NZ BROKERS HOLDINGS LIMITED. and its investment in BrokerWeb. McIvor is a New Zealander who went to Australia when Crombie Lockwood was part of the Westfarmers Group, to work for OAMPS. He then left to work at Austbrokers.

McIvor and Searles will join the BrokerWeb board.

Searles said, together with BrokerWeb and its existing New Zealand partners, Austbrokers would continue to look for opportunities to leverage Austbrokers’ established and diversified business areas of insurance broking, underwriting agencies and risk services as the company continued to grow its New Zealand presence and distribution network.

In line with Austbrokers’ equity ownership model, BrokerWeb Risk Services chief executive David Archer, and BrokerWeb Management chief executive Jim Harris, will remain in their current roles and lead the daily business operations.

All businesses will continue to trade under their existing brands and will leverage support as required from Austbrokers’ group services.

“We are very excited about the future and furthering our planned expansion with the support and partnership that Austbrokers Holdings brings to BWRS,” Archer said. “Over the years we have admired the Austbrokers ‘owner-driver’ model. We respect the success of many current Austbrokers broking businesses in

Australia, which made our decision to partner with Austbrokers in New Zealand a natural fit. With the support of Austbrokers Holdings we can accelerate our plans to be one of the leading broking houses within New Zealand.”

Harris said: “We were impressed by the experience and commitment of Austbrokers Holdings to support our broker members and their clients. We share the same philosophy that the partnership between insurers and brokers is vital in providing quality and sustainable insurance solutions to our clients.

We look forward to enhancing the benefits and services we deliver to our current and future members, and to expanding our position as the preeminent broking cluster group in New Zealand.”

Austbrokers Holdings entered the NZ market in 2006 through its partnership with Insurance Advisernet, taking an effective 38% equity stake in Insurance Advisernet NZ, a leading broking group which has grown to have 32 authorised representatives and more than $70 million in GWP. Combined with the BrokerWeb acquisitions Austbrokers becomes a formidable force in the New Zealand insurance market, with $350 million in total GWP, more than 70 brokerages and authorised representatives, and 120,000 clients.

www.covernotemag.co.nz

29

NEWS

A

Hamilton-based commercial insurance broker has launched a new brand to reflect its commitment to fully disclosing income to its clients.

Hutchison Rodway Waikato has launched Frank Risk Management.

Frank Risk Management directors Rene Swindley and Andrew Newman said business owners had the right to know what they were paying for and Frank Risk Management was unique in that the company had always operated on a full disclosure basis without hidden commissions.

“Frank is a good name for our company, because that’s what we are - upfront and frank,” said Swindley.

“From our point of view, eventually New Zealanders should see a shift in regulation that will make all insurance brokers disclose their income, as they currently do overseas. We’ve always been ahead of the industry in this respect,” he said.

Newman said greater disclosure was catching on with other brokers, but it was often a reactive measure and all that was disclosed to the client was the fees charged on top of a commission that the broker received with no disclosure of the amount of commission itself.

CLIENTS NEED TO KNOW THE TOTAL RENUMERATION SO THAT THEY CAN MEASURE THIS AGAINST THE VALUE THE BROKER ADDS. “This is not full disclosure. Clients need to know the total remuneration so that they can measure this against the value the broker adds,” Newman saod.

The directors said their business has experienced rapid growth since they first started in 2008, which was partly due to income disclosure, but also the risk management support and disaster recovery planning that they built into their overall service.

“This means our clients are less vulnerable to the ebbs and flows of the insurance market and are taking a longer-term view of their risk expenses, generally with better results. Since the Canterbury earthquakes many businesses have had a rough ride with increasing premiums and restrictive cover. Taking charge of matters pays,” said Swindley.

The directors said while Frank Risk Management was not claiming to provide the cheapest service, it was putting its stake in the ground as a company that was committed to providing greater value as a result of full income disclosure.

“Often it’s a business who has had a bad claims experience and thought that it wasn’t fairly represented who sees the importance of knowing exactly what they’re paying for and the value they’re getting out of their broker,” said Swindley.

Partner Jaden Hatwell said the company of seven is excited about the new brand.

“We have invested a lot of time into the change of identity, and we think it is important to emphasise the difference between Frank and our competitors,” he said.

30

December 2014

NEWS

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do not provide adviceon onany this insurance based on consideration of your objectives, financialor situation orBefore needs. Before making a decision, We do not provide advice on thisWeinsurance based consideration ofany your objectives, financial situation needs. making a decision, Global Transport & Automotive Insurance Solutions Pty Ltd ABNDisclosure 93 069 048 255 (Incorporated inavailable Australia) trading inorNew Zealand as consider the relevant Product Statement or available Policy Wording your broker intermediary. please consider the relevant please Product Disclosure Statement or Policy Wording from your from broker or intermediary.

Motor & General Underwriting Agency, acts as the agent of the Insurer, Allianz Australia Insurance Limited ABN 15 000 122 850 (Incorporated in Australia) trading as Allianz New Zealand, Level 1, 152 Fanshawe Street, Auckland 1010.

We do not provide advice on this insurance based on any consideration of your objectives, financial situation or needs. Before making a decision, please consider the relevant Product Disclosure Statement or Policy Wording available from your broker or intermediary.

FEATURE

Looking ahead

Stuart White, CEO, Macquarie Pacific Funding

O

ver the past year the New Zealand insurance industry has experienced significant change in both the underwriter and broker segments and capital has continued to be freely available globally.

With this as a backdrop it was great to be challenged by the thought-provoking topics at the IBANZ convention around “the next wave” of change.

Looking at the year ahead, one of the biggest drivers of change that we expect will continue for the insurance industry is the evolution in buying habits and expectations of borrowers (clients). The shifting needs of clients are helping to reshape the already competitive insurance industry and we expect this will continue to strongly impact the industry over the next year.

With clients’ needs and behaviours evolving, it is important that the industry works to meet these changing needs from both a product design and delivery perspective. Not only do we need to create products and services that respond to these changing needs but we must ensure our customers understand the value we add – and are prepared to pay the appropriate price.

Technology and social media gives clients more information at their finger tips and thus

32

December 2014

LOOKING AT THE YEAR AHEAD, ONE OF THE BIGGEST DRIVERS OF CHANGE THAT WE EXPECT WILL CONTINUE FOR THE INSURANCE INDUSTRY IS THE EVOLUTION IN BUYING HABITS AND EXPECTATIONS OF BORROWERS (CLIENTS). control. They expect greater choice, delivered faster and customised to them. It also provides customers with more ways to make decisions. It is no surprise that we are seeing clients moving to direct distribution and, as a result, buying their insurance from the internet, and using aggregators rather than doing it face to face.

An increased use of technology and social media is challenging brokers to adjust the way they connect with clients. It is ensuring they look at ways to add value and to provide the flexibility and choice the client is looking for. It is important that brokers think about how they get clients to understand their value proposition and how each component of the insurance product and service chain helps them deliver that value.

Efficiency is no longer just about reducing cost.

It is delivering an acknowledged value to a client in line with their heightened expectations.

As a premium funder, we are an enabler in the insurance purchasing process. It is important we develop scalable platforms for brokers to offer payment solutions that meet changing client expectations and fit seamlessly with brokers systems and processes. Our online acceptance capability that allows clients to accept premium funding loans from their smartphones, without the need for paper contracts and signatures, is a good example of how we are rising to this challenge. There is a lot more change to come and with it more solutions and I find that an exciting challenge to accept.

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To discover just how easy it can be to provide innovative, streamlined premium funding to your clients call 0800 000 246 or visit macquariepacific.com

Premium funding loans are provided by Macquarie Equipment Finance Limited, NZ Company Number 262381. All loans are subject to satisfaction of approval criteria. This information has been prepared for general information purposes only, without taking into account your personal objectives, financial situation or needs. The information is not an expression of opinion or recommendation and does not constitute financial, accounting, taxation, general or personal advice and should not be relied on as such. You should make your own assessment of any products or service referred to and seek appropriate advice.

MAC0072

COVER STORY

M

REGULATION UNDER REVIEW 34

December 2014

any advisers may leave the industry if next year’s review of the Financial Advisers Act puts more pressure on RFAs, industry commentators say.

The Act is due for a review in 2015. One of the areas that has been flagged as likely to gain attention is a lack of public understanding about what the AFA and RFA designations mean, and differences in the regulatory requirements of each.

It has been predicted that RFAs could come in for more regulation.

Legal experts have said the differences in the requirements between the designations are not necessarily justifiable.

David Ireland, of Kensington Swan, said he thought there should be more scrutiny on the requirements placed on RFAs, compared to AFAs. He said registered advisers’ disclosure requirements were inadequate. Bradley Kidd, of law firm Chapman Tripp, agreed: “AFAs have a significant disclosure regime and RFAs less so. Is that justifiable on a product basis?”

IBANZ chief executive Gary Young had noticed the regulators were under growing pressure to look at the RFA designation. He said: “No one understands the difference between RFAs, AFAs and QFE advisers. The question is being asked – why do we have all these different types of adviser, do we need to rationalise them in some way? But the last thing we want is for everyone to be shunted up to AFA status. That would rapidly reduce the number of advisers out there.”

Kidd said commission was something that could be up for review, too. “If they look at the spectrum of options [banning commission] is

COVER STORY

NO ONE UNDERSTANDS THE DIFFERENCE BETWEEN RFAS, AFAS AND QFE ADVISORS. THE QUESTION IS BEING ASKED WHY DO WE HAVE ALL THESE DIFFERENT TYPES OF ADVISER, DO WE NEED TO RATIONALISE THEM IN SOME WAY?

one, but it comes with significant consequences, particularly in our market.”

He said it might drive a segment of advisers out of the market and make it harder for consumers to access advice.

More study might also be on the cards. Massey University financial sector expert Claire Matthews told a recent panel discussion in Auckland that adviser education standards should be lifted when the Act is reviewed.

“At the moment to be a non-AFA adviser you don’t need any qualifications. If you want to be an AFA, you need a level five certificate… that level five certificate is equivalent to one semester – three or four months’ work – of first year university. That’s what our top AFAs have to have. Is that really adequate?”

She said advisers who were not AFAs should be required to complete level five and AFAs should have to meet much higher standards. There was also too much difference in terms of what was required of AFAs and nonAFA advisers, she said.

“I know category two products are simpler but they’re not riskless, people should still be getting good quality advice.”

There are also arguments that delineation between RFAs and AFAs should be more about the type of the advice that is being offered than the products that are being advised on.

Barry Read, of compliance business IDS, said the industry should move away from categorising advice based on the products that were being provided. He said anyone who provided personalised advice should be considered an AFA and be required to make sure they were giving a service that was suitable. “That should be across any product range, not just investments.”

It was only a late change to the legislation that had meant AFAs were largely those dealing with investment products. “I remember when the change was made, I was on a beach in Fiji. I had just spent six months dragging 200 insurance advisers and mortgage brokers through the level five certificate for all of them to turn around and tell me ‘we told you we didn’t need to do it’.”

He said about 50 of those advisers went on to complete the certificate anyway.

Read also wanted the requirements for adviser disclosure statements reviewed. “RFA adviser statements say ‘hi, I’m Barry Read, I’m a registered financial adviser, not authorised, and I can give advice about these products.

Here’s three ways to complain about me. I don’t know about you but if I was going to a doctor for a prostate exam and the first thing he did was hand over a disclosure statement and say ‘if things go bad here’s how to complain’ I wouldn’t stick around.”

He said it would be better to disclose an adviser’s qualifications, remuneration and the type of advice they could give. “Then once you engage the adviser, they’ll let you know what you can do if things go wrong.”

AFAs did not necessarily give better advice than RFAs, Read said. “If anyone asked me whether AFAs give better advice than QFE advisers or RFAs, I would say it’s completely missed. Some RFAs give brilliant advice.

There’s no rhyme or reason to it. There are good advisers and bad advisers in all categories. What New Zealanders want to know is who are the good ones and who are the ones that are not just trying to sell me something.”

But whether it was even time to review the Act was not clear, IBANZ’s Young said. “What is the problem we are trying to solve? In one sense it seems far too early, [the legislation] has only been running for three years properly.This review is only happening because the legislation says it has to.

Do we need to review it right now? It’s a bit early, we should give it some time to settle rather than racing in there.”

www.covernotemag.co.nz

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COVER STORY

day can y r e v e s l oa ts! g mini-g n i v e ur resul i o h y c a & w s o s H ne our busi y m r o f s tran

A

s a busy insurance broker, it’s sometimes difficult to pause the short-term productive sales side of your business, to work on organisational strategy which will benefit you over the long term. While we all agree setting robust long-term strategy is important, most people just don’t to do it that well, or even do it at all.

However, what if we could become more efficient and reach our goals by making small positive tweaks to our business every day?

THE 1% PRINCIPLE My 1% Principle simply states: “What is one thing I can do today to improve my organisation by 1%?”

Unlike a formal strategic planning programme, the 1% Principle is more of an organisational philosophy.

Aristotle wrote three centuries before Christ: “We are what we repeatedly do. Excellence, therefore, is not an act but a habit.” Its therefore vital that both organisations and individuals focus on making numerous small “microimprovements” an ongoing habit in their dayto-day business and life.

WAYS TO APPLY THE 1% PRINCIPLE IN

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December 2014

WE ARE WHAT WE REPEATEDLY DO. EXCELLENCE, THEREFORE, IS NOT AN ACT BUT A HABIT. YOUR BUSINESS Finance What is one way to reduce business expenses by 1% that you can apply today?

Practise energy-saving behaviours by turning off office lights and computers at the end of the day.

When you travel, try to book ahead as far as possible to get the best deals.

Form a buying alliance with another business or a trade association for bulk purchasing discounts.

Human resources What is an encouraging way you can motivate a member of your team today?

COVER STORY

Tom O’Neil www.OnePercentGuy.com

IF WE ACTIVELY LOOK TO TWEAK OUR BUSINESSES BY 1% EACH DAY, WE CAN QUICKLY MAKE GREAT PROGRESS TOWARDS WHAT WE WANT OUR ORGANISATION TO BECOME TOMORROW. Assess innovative ways to attract talented employees through staff and industry networks.

Design an advertising template to streamline your recruitment processes.

Supply chain/logistics Negotiate with your current suppliers cheaper rates for the products and services you are using.

Sales What new initiative can you put in place to increase business income by 1% this week?

What is a current product or service your business offers that you can propose to a current client who is not using this solution?

Marketing Go on the internet and check out similar companies operating in different international markets. What do they offer that you do not?

What can you add to your products and services that would be of benefit to your customers?

Ask for referrals from current clients who are your “fans”. By telling others what they’ve gained from using your business, your sources can encourage others to use your products or services.

Strategic planning

Break down your organisation into between five to eight key areas. (For example, sales, human resources, finance, marketing, operations, etc.).

For each of these key areas, brainstorm what these areas would look like in 10 years’ time if the organisation was highly successful.

Set tangible short, medium and long-term goals for each of the key areas above.This process will allow you to quickly develop a framework for each of these areas, as well as set signposts to determine your success on an ongoing basis.

Information technology Take 20 minutes to read about latest technology updates. Assess how these apply specifically to the insurance industry and how you can best apply them.

Change management What are some legacy/ancient systems and processes in your organisation that need to be culled?

Customer services What can you do with your next customer to make their day? Find a way to go above and beyond with every single customer interaction today.

Micro-improve your business every day and

in every way.

If we actively look to tweak our businesses by 1% each day, we can quickly make great progress towards what we want out organisation to become tomorrow.

About Tom O’Neil www.OnePercentGuy.com - Tom is international author of the Amazon best-seller ‘The 1% Principle’, published through Harper Collins in the USA, UK, Australia and is New Zealand.

He is also an award winning keynote speaker and NZ Herald Business Columnist who inspires, excites and challenges professional audiences and corporates looking to improve their short, medium and long term performance.

All text © 2014 Tom O’Neil – AchievementExpert.com

www.covernotemag.co.nz

37

FEATURE

How social is your business?

By Sara Reid, GFM Web

I

t’s no longer enough to have a great website and some fantastic branding. If you don’t have a solid social media strategy, your business is missing out.

A report this year from the Social Media Examiner found that 92% of business marketers found they had increased their exposure with social media.

Eight out of 10 had noticed a positive difference in traffic because of their social media strategy and more than half had seen that translate into an increase in sales.

It’s getting easier to reach more people: 2.5 million New Zealanders have a Facebook account and Google has enabled a new search function that delivers social media profiles alongside other results.

It’s not just for teenagers, either. Research has shown that social media use is growing at the fastest rate among people over 50.

2015 could be the year that your business really makes the most of the opportunities available from social media.

But it isn’t as simple as starting up a Facebook page and asking your friends to like it. Just because you, or one of your staff, is an Instagram addict, it doesn’t mean that they will be your business’ social media whiz. Your social media strategy should be as carefully honed as any other part of your business plan.

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December 2014

First, decide which channels you want to work with. You need to engage across those that suit your business.

A good rule is to limit your business to five platforms, and use them well. Have a look at what other similar businesses are doing and what is working for them.

Facebook, Twitter and Linked In are usually the basic platforms to work on. Instagram is fabulous for businesses such as clothing retailers or designers who want to showcase their latest wares. YouTube is a great option for businesses that make or do impressive things and can document their teams at work.

For an insurance broking firm, you most likely will get the best benefits out of Linked In, Facebook and Twitter because your focus will be on educating your clients and sharing information that is useful to them.

Work out when your target market is most likely to be engaged and post accordingly.

Many businesses find that this is 10am and 2pm, but you may find you do well posting in the evenings, when your clients have time to peruse their smartphones.

Don’t just post at your audience but encourage them to interact with you.

Respond to comments and questions. Even a negative post from a member of the public is a chance to offer a good impression of your business.

Remember, your fans or followers can “unlike” you as quickly as they liked you, so make sure they’re getting something out of the experience, too. Don’t make every post a sales pitch but offer useful information, or at least a daily dose of entertainment. Don’t just rely on text – everyone’s social media feeds are so full of words, a great picture really stands out.

Many social media platforms offer free analytics to help you work out how well your campaigns are working. These are invaluable.

A lot of businesses approach social media as an afterthought but it is an increasingly powerful business tool that can yield real results. If you don’t have anyone on staff who is confident, contact an external provider.

Many companies will run campaigns for you and the investment will pay off.

92% OF BUSINESS MARKETERS INCREASED THEIR EXPOSURE WITH SOCIAL MEDIA.

COMMITMENT IS EVERYTHING. Exceptional service doesn’t happen by accident. It takes years of experience and organisation-wide dedication to build a customer-focused network, committed to serving the needs of our clients and brokers, in New Zealand and around the world.

AIG is a full service partner that can respond to all of your commercial insurance needs.

Talk to us today, or learn more at www.aig.co.nz

@AIGRugby www.aig.co.nz Insurance and services are provided by AIG Insurance New Zealand Limited, a subsidiary of American International Group, Inc. For additional information, please visit our website at www.aig.co.nz

www.covernotemag.co.nz

39

NEWS

i l l Se

40

December 2014

u b ng

s s e s in

NEWS

T

his year, Ross Iremonger faced a big decision for the future of his insurance broking firm: Take on more staff, buy another business or sell up.

He had built up his business, Iremonger Insurance Brokers, over 12 years, after 30 years in the insurance industry.

He had found a niche offering advice to commercial and corporate clients.

But he discovered that as the regulator cracked down on the financial advice sector, the regulatory burden on his business grew, and he was spending less time doing what he enjoyed and a lot more time on paperwork.

Iremonger said the work of keeping up with his compliance requirements was taking up too much of his time, which should have been spent on clients.

“I was spending more time in that area, which is really unproductive and not really my area of expertise. The area that I like is looking after clients, face-toface time with clients and operating as an insurance broker but there’s more and more regulation behind the scenes.”

So, at the end of October, Iremonger settled the deal to sell Iremonger Insurance Brokers to Brokerweb Risk Services, a member of the Brokerweb Cluster Group owned by the group’s founders, Jim Harris and David Archer.

He was already a member of the 40-strong cluster group so had a clear idea of what becoming a part of the organisation might mean.

“I weighed it up and it was best to join someone I knew well with a good structure in place I could join and have people look after the administration and support roles, sitting in behind me. Now I can do what I’m good at and what I know.”

Iremonger said there seemed to be a growing trend for the industry’s bigger businesses to want to absorb smaller firms. He had been approached several times over recent years from people interested in taking over his company.

“It seems to me that a lot of big brokers are looking to acquire smaller businesses and internationals are looking to acquire smaller broking companies.You tend to get approaches quite often.”

Brokerweb did not offer more money than others who had made a play for the company but Iremonger said it offered the benefit of working with people he knew well and using services he was familiar

with. “They had done a good job with other members of Brokerweb so because of that I decided the best fit at the end of the day was to sell to Brokerweb so I will essentially be working with them until I retire.”

The business will take on the branding, too.

Iremonger said it was becoming increasingly difficult for small broking firms to take on the large international players in the market, although cluster groups helped.

He expected to see other one-man band practices selling up over coming years. “I hate to think of myself as old but I would think it’s also got something to do with the ageing of brokers in the market at the moment, there’s been a lot of it in the last 12 months. It’s kind of unfortunate in a way, there will be fewer brokers. But it’s driven by the cost and time required by compliance and admin.”

Archer said the acquisition enabled Brokerweb to keep the strength of the group. He said Iremonger was respected and admired. “He’s a guy very much like us, we like his style, approach and attitude… we’ve courted him for some time.”

Iremonger would add strength to the Auckland operations, he said. “And he is already seeing the benefits, he is relaxed, seeing the depth of support he’s getting and the added benefits for his clients. All round, it’s a pretty good fit for us.”

Archer said the company had acquired four broking businesses in the past 12 months and had an acquisition strategy.

Brokerweb Risk Services had been set up to perform this function shortly after the cluster group was established, he said. “We couldn’t afford to build a cluster group only to have it waste away through acquisition by other broking houses. We formed Brokerweb Risk Services to be an acquisition company for businesses to sell to. It’s a concept that’s worked really well, the guys who’ve sold to us, the wealth they’ve acquired in addition to selling their businesses is quite remarkable.”

Those who sold their businesses had been offered shares in the company. “Those shares have gone to quite big heights now.”

www.covernotemag.co.nz

41

FEATURE

FMA relaxed about increasing online options C

ountdown is the latest brand to offer insurance sales online or over the phone but its managing director says consumers need to be sure the insurance they are buying meets their needs.

The supermarket chain started dealing in insurance products last month.

It has partnered with Cigna Life to offer bill protection, pet, travel and accidental death and life policies.

It is expects the products to be price in the bottom quartile for such services.

Research commissioned by Countdown found that while 89% of people had car, house or contents insurance, just 46% had personal insurance. Reasons cited for not having cover were the expense, that people were busy or wouldn't use it.

Countdown managing director Dave Chambers said the product that the supermarket chain was pushing had been tailored to resonate well with New Zealanders.

But he said it would not be available in stores. Customers would have to purchase insurance online or over the phone. “The checkout

experience is not the place to buy insurance,” he said.

He said when a customer phoned to discuss insurance, they would speak to someone from the Countdown insurance team, who could make sure the product met their needs. “It’s got to be tailored to that particular consumer.”

Chambers said there was an underinsurance problem in New Zealand and good value insurance was a fit with the Countdown brand.

Financial Markets Authority director of compliance Elaine Campbell said the regulator had no concerns about insurance being sold online or over the phone.” It’s important for New Zealanders to be able to find easy access to life insurance. The providers who make their products available through these sites and retail outlets must all be licensed and they will be able to connect prospective customers with an adviser.

When people are considering more complex insurance products it is a good idea to seek advice.”

CUSTOMERS HAVE TO PURCHASE INSURANCE ONLINE OR OVER THE PHONE, THE CHECKOUT EXPERIENCE IS NOT THE PLACE TO BUY INSURANCE.

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December 2014

We are

insured.

Our construction risks are insured by ACE.

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It means our construction risks are protected by one of the largest and strongest insurers in the world. ACE people truly understand the range of liability issues our company faces and go out of their way to find comprehensive solutions. Knowing the ACE team is there when we need them allows us to operate with confidence.

© 2014 ACE Group. Coverages underwritten by one or more companies of the ACE Group. Not all coverages available in all jurisdictions. ACE®, ACE logo®, and ACE insured are trademarks of ACE Limited.

ISO CASE STUDY

RECORD-KEEPING & DISCLOSURE This case study is a reminder of the importance of keeping records and file notes.

Should a future issue arise, financial advisers must be able to prove they had exercised care, diligence and skill in the advice they provided.

44

December/January December 2014 2014/2015

A

nna* completed an application for medical insurance with her broker, Ms B*. Cover was provided by an insurer, XYZ*.

Some years later, Anna made a claim for hip replacement surgery. XYZ requested Anna’s medical notes and discovered a number of medical matters had not been disclosed when Anna applied for the policy. XYZ avoided the policy and declined Anna’s claim.

Anna said that she had disclosed all of her medical problems to Ms B, and Ms B had not written them down. She also advised that she only changed from her previous health insurance policy, which she had held for nearly 30 years, because Ms B “came up with a good price”.

Ms B said she wrote down on the application form everything Anna told her, and she had informed Anna that it was vital to

disclose all of her medical conditions to XYZ. THE APPLICATION PROCESS When Anna and Ms B arranged the policy, Ms B completed the application for Anna, and Anna signed a declaration that the information provided was true and complete, and that nothing had been withheld.

In the replacement business form, Ms B recorded Anna’s reasons for changing her health insurance policy were better cover and better price.

NON-DISCLOSURE Legally, it was Anna’s responsibility to disclose all material information to XYZ, even if she did not complete the application herself.

While Anna said that Ms B had failed to write down some of the information, Ms B disputed this, and there were no documents available to help resolve this conflict of evidence. In any case, Anna signed a declaration stating that all

ISO CASE STUDY

THE FINANCIAL ADVISERS ACT 2008 STATES THAT ALL FINANCIAL ADVISERS MUST EXERCISE THE CARE, DILIGENCE, AND SKILL THAT A REASONABLE FINANCIAL ADVISER WOULD EXERCISE.

the material facts had been provided.

Anna was aware of her medical history and ultimately was responsible for the nondisclosure. Because material information was not disclosed, XYZ was entitled to avoid the policy from inception and decline the claim.

DUTY OF CARE The Financial Advisers Act 2008 states that all financial advisers must exercise the care, diligence, and skill that a reasonable financial adviser would exercise in the same circumstances, taking into account the nature and requirements of the client, as well as the nature and circumstances of the service provided.

The Financial Markets Authority website states that, in general, when providing advice, advisers must: • assess the product’s suitability for the client’s needs;

• explain the key features and any limitations of the product to the client; and • clearly articulate any limitations on the service being provided.

The FMA states that advisers should keep records, to show how they have fulfilled the care, diligence and skill requirement.

If recommending replacement of an insurance policy, the FMA states that advisers should explain the material differences in the policies, including any loss of benefits, as well as the specific adverse consequences of changing policy or provider.

DID MS B EXERCISE SUFFICIENT CARE, DILIGENCE AND SKILL? The only record of Ms B’s advice was about the positive aspects of changing cover.

In order to demonstrate care, diligence and skill, the ISO Scheme would expect to see a file note documenting Ms B’s discussion with Anna about: • the importance and need for full disclosure; and • the adverse consequences of changing policies; particularly, the risk of transferring from a health insurance policy held for nearly 30 years.

Ms B had a responsibility to ensure that she provided the correct advice and to prove she had done so, by providing the appropriate documentation.

As she did not, the ISO Scheme case

manager believed Ms B had not exercised the care, diligence and skill that a reasonable financial adviser would exercise in the same circumstances.

QUANTIFYING THE LOSS The loss suffered by Anna was the cost of the surgery: $20,000; a cost that would have been covered under her previous medical insurance.

The main reason Anna suffered loss was because she failed to disclose her complete medical history. However, because Ms B failed to exercise the required care, diligence and skill, she contributed to Anna’s loss. If Anna’s attention had been properly drawn to the consequences of changing her medical insurance, and of failing to disclose, the outcome might have been different. In either case, if Ms B had provided evidence that she acted properly in respect of the advice, Ms B would have been absolved of any obligation to contribute towards the resulting loss.

The case manager assessed the amount of Ms B’s contribution to the loss at 25%.

Because Anna had to pay $20,000 for her hip replacement, the case manager found Ms B was liable to make a payment to Anna of $5,000.

COMPLAINT PARTLY UPHELD. * Names have been changed to preserve anonymity.

www.covernotemag.co.nz

45

FEATURE

INSURANCE NEEDS TO BOOST AGILITY T hree-quarters of insurance marketing professionals think they are too slow to take new products or services to market and struggle to keep pace with consumer demands, new research shows.

Financial services outsourcing and software provider Target Group has launched its Four Ds of Insurance whitepaper.

Its research shows that 78% of respondents think insurance products should be more dynamic in adapting to changing consumer behaviour.

Respondents to it survey also said big organisers were less likely to be able to get new offerings to the market consistently and quickly. Just 13% of large organisations said they did that well, compared to 23% of smallto-medium enterprises.

A combination of the volume of launches, legacy product lines, legacy systems, complex structures and multiple sites were all factors cited.

Target Group commissioned

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December 2014

the research to help insurers determine how to deal with the challenge of developing products in a changing insurance landscape.

It said one key finding what that there was a need to develop products that were dynamic and would harness the data available to insurers, to secure a competitive advantage and meet consumer demands.

Target Group business development manager Simon Burgoyne said: “For an industry focused on future risks, insurance companies can be slow to adapt to future challenges. We are in the midst of an innovation wave driven by the four d’s of insurance - dynamic products, changing distribution patterns, the use of data and disruptive new technologies. For insurers, underwriters and distributors it brings the promise of both threats and opportunities. It offers the potential for new products and growth, aligned with greater customer insight, the ability to

78% OF RESPONDENTS THINK INSURANCE PRODUCTS SHOULD BE MORE DYNAMIC IN ADAPTING TO CHANGING CONSUMER BEHAVIOUR. tailor products and pricing, as well as the prospect of radically transforming interactions between market participants.”

He said consumers were showing more signs of becoming ever-more brand agnostic in respect of their purchasing behaviour and were demonstrating an increased willingness to purchase cover from other large organisations, not just traditional insurers.

“Clearly this poses a threat to current business models and illustrates the need for new

strategies. Innovation and agility will determine the insurers who will win the new race. Slow adopters will inevitably fall behind.”

But he said insurers that remained innovative and developed products consumers wanted in a way they wanted them would have a bright future.

“Our whitepaper demonstrates that many insurers are only at the start of that journey and we hope offers some strong insight for successfully navigating the road ahead.”

CASE STUDY

English court clarifies a broker's duty when arranging business interruption insurance

By Crossley Gates, DLA Phillips Fox

A

recent English High Court decision is a ray of hope for insurance brokers and their exposure to a professional negligence claim.

The broker acted for a waste recycling company and was instructed to arrange business interruption insurance. Following a fire at the client's premises, the business interruption insurers threatened to avoid the policy by reason of gross underinsurance. The turnover was declared to the insurers at £11 million, whereas it should have been £17 million. A compromise was reached whereby the client accepted a lesser sum from the insurer than the value of its business interruption losses.

The client then alleged that the broker had: • Given no explanation of how to calculate the sum insured.

• Incorrectly sought cover for turnover of £11 million, when in fact the turnover was more like £17 million.

• Not paid attention to the client's accounts, provided after the insurance was arranged, which showed the turnover at over £17 million.

The Court found in favour of the insurance broker. The Judge accepted evidence that: • The broker had gone through the calculation of a gross profit sum insured by reference to an explanation in a renewal report, • The figures had come from the client who ought to have known the correct turnover figure, and • The broker's belief that the right figure had been given was reasonable given the significant increase from the year before. This had all the hallmarks of a proper inquiry and explanation.

Helpfully, the Court set out some principles that insurance brokers should apply to business interruption advice:

1 The broker has to provide a significant explanation to the client to enable the client to calculate the appropriate sum insured and indemnity period. This will probably require an explanation of the terms used in the business interruption formulae in the policy.

2 To do this, the broker needs to take reasonable steps to ascertain the nature of the client's business and its insurance needs.

3 Reasonable steps should be taken to ensure that the client understands the term 'gross profit' in a business interruption policy context.

4 Much depends on the circumstances of the case - the broker's obligations to assess its client's needs will depend on the client's sophistication.

5 Advice does not necessarily have to be repeated annually if given previously and understood, as long as the same person is dealing with the client's insurances.

6 If a client who appears to be well informed provides a broker with information, the broker is not expected to verify it unless there is reason to believe it isn't accurate.

7 If express instructions are given after all these requirements have been met, then the broker must be careful to adhere to those instructions.

It was clear from the decision that file notes and records can make the difference between a finding of liability and not. Brokers should ensure that they keep clear and accurate records of communications with clients to put themselves in the best possible position if their advice is challenged.

I imagine a number of insurance brokers will be relieved to learn of this decision. The Court appears to have adopted a common sense approach to broker/client relationships, which is to be welcomed.

www.covernotemag.co.nz

47

Professional

Professional Development: Professional IQ College

College

Principal’s Update

I

came across this diagram the other day on leadership and I thought it clearly showed the qualities of a good leader. We at the College focus on developing quality courses and programmes so you can develop your people. In developing your people you show good leadership. When was the last time you recognised your staff for the small things they do, or encouraged them to achieve their goals by setting the goals and supporting them to reach them? When I was CEO at the Real Estate Industry Training Organisation there was a saying in real estate that “as long as the person was warm and breathing

48

September/October 2014

they could sell houses”. Today in the postregulatory environment real estate operates in this is no longer enough. In insurance broking and financial services this is also not enough anymore. Having great customer service through great product knowledge and going the extra mile for your clients will ensure your business grows.

With the increased focus of the FMA on compliance of RFAs and the long talked about review of the legislation due in 2015 now is the time to ensure you show good leadership and mitigate some of the risk of any changes to the legislation may bring. To do this, ensure you and

your people can evidence knowledge and skill in terms of the Code. There will be, I’m sure, strong lobbying in some quarters next year to increase the compliance for RFAs to become more in line with that of AFAs. So be proactive and ensure you get qualified to level five through Professional IQ Colleges and or do our workshops and webinars.

There is no guarantee in this life, only change and while at this point in time we can’t predict the level of change (if any) the legislative review might bring, now is the time for the insurance broking industry to step up and show good leadership.

As this is the last Covernote for the year thank you all for your support of the College throughout the year.There have been some huge changes this year and next year promises to see more new qualifications and new courses to ensure you can stay up-to-date and increase your professionalism.

Have a great Christmas and New Year - be safe, be kind to each other and I’ll talk to you all next year.

Lesley Southwick Principal

The importance of cyber insurance for small businesses C

yber insurance is a growing business. As insurance professionals, you’ll be aware of how important it is for businesses to possess cyber liability insurance. But unfortunately many of your clients won’t, as it’s popularly believed, that cyber insurance is something that only big corporations need. On the contrary, cyber insurance can give small businesses much-needed extra cover, and it’s up to you to let them know that.

Ask your clients how they’d cope in the event of a cyber attack. If a hacker accessed their customers’ names and contact information, what would happen? Is there any sensitive employee information they’d dread hackers getting hold of? And what would happen to business revenue

if the website was disabled and couldn’t take orders?

Having readily available support and cash at such a critical time will often be what keeps a company afloat. Businesses can’t rely on their general liability insurance to cover the costs, since these generally exclude losses that were incurred because of the internet. Essentially, cyber insurance is there to pick up the extra “what-ifs” where the general policy ends.

Many business owners would be surprised by how far cyber insurance can cover them in the event of an attack. Good cyber policies automatically cover business interruption, the cost of notifying customers, and even in some cases any fines incurred because of the data

A GOOD CYBER POLICY SHOULD COVER LAPTOPS AND SMARTPHONES, SINCE THESE ARE VULNERABLE TO ATTACKS TOO.

breach. In addition, some policies can even include the expense of having to hire a public relations team to repair the damage to the company’s reputation.

Business owners should also consider what mobile devices a company would need to get insured.A good cyber policy should cover laptops and smartphones, since these are vulnerable to attacks, too.

While big companies have the resources for a big risk management team who can keep track of policies and procedures, a small business won’t have the ability to do that.That’s why they should think of their insurance broker as an extension of their business that helps protect them if the worst should occur. In the computer age, hacking is always a very real threat so let your clients know that you’ve got them covered.

If you’re keen to talk to your clients about cyber insurance, or brush up on your knowledge, check out our website (www.professionaliq. co.nz) for upcoming courses or email Lesley if you are keen to have a cybercrime workshop come to you. lesley@professioanliq.co.nz

www.covernotemag.co.nz

49

Professional

Professional Development: Professional IQ College

College

Broker Support Certificate Programme (31 CPD points) FOR NEW BROKERS OR BROKER SUPPORT STAFF ’ve had several brokers ask me for a product-specific insurance broker certificate. This is an ideal qualification to start your new people on.

For domestic brokers or those in a broker support role or similar, this programme is perfectly designed to provide you with the skills and product knowledge you need. The programme is flexible and includes two workshops and nine online short courses, with the primary focus on introduction level technical skills and product knowledge. This is a 12-month programme.

Below is the outline of the courses included in the certificate. We suggest most people start with the online short courses. It is far more cost effective to enrol in the whole certificate.You will save more than $300 plus GST. The programme is divided into modules, which are all compulsory. Workshops will be offered throughout 2015. http://professionaliq.co.nz/Broker-Support-Certificate/10180/ Enrol before the end of December 2014 and get the special introductory price of $1200.00 plus GST.

I

CORE MODULE Compulsory

DELIVERY MODE

Insurance Essentials

Online short course

World of Insurance

Workshop

Introduction to Regulation, Codes of Practice and Scope of Service

Online short course

4

Communication Skills

Online short courses

3

Policy Construction

Online short courses

3

Introduction to Claims

Online short courses

3

House and Contents

Online short courses

3

Contract Works-Residential and Small Commercial

Workshop

Introduction to Rural

Online short courses

3

Private Motor

Online short courses

3

Pleasure Craft

Online short courses

3

CPD 3 1.5

BROKER PRACTICE MODULE Compulsory

PRODUCT KNOWLEDGE MODULE Compulsory

Total CPD Points

50

September/October 2014

1.5

31

NZ Certificate in Financial Services Level 4

T

his is an introductory qualification to the regulatory environment for brokers, broker support, administration, call centre staff and customer service and claims people. This is a vastly improved qualification to the previous National Certificate level 4 and is far more industry focused.

Combine this qualification with the PIQ Certificate in Broker Support and your new people will have a well-rounded knowledge of the insurance and financial services industry.

Now available for the first time by module.

MODULE 1 – FINANCIAL SERVICES ENVIRONMENT IN NEW ZEALAND (NZQA 15 CREDITS) $424.50+GST Gain a broad understanding of the financial services environment in New Zealand; what the key sectors are, and their interrelationship with consumer needs.

MODULE 2 – APPLICATION OF REGULATORY RESPONSIBILITIES (NZQA 15 CREDITS) $424.50+GST Increase your knowledge by gaining a broad understanding of legislation, regulations, ethics, risk and compliance and apply risk and compliance strategies within your own organisational guidelines.

MODULE 3 – FINANCIAL PRODUCTS AND SERVICES FOR CLIENTS (NZQA 20 CREDITS) $566.00+GST Gain broad knowledge of services and products available across the financial services industry to meet identified customer needs. Apply the advice process across the financial services industry.

MODULE 5 – (ELECTIVE) INSURANCE INDUSTRY IN NEW ZEALAND (NZQA 10 CREDITS) $283.00+GST Gain a broad understanding of different types of fire & general, life & health products and client solutions to standard risk situations.

If you enrol in the whole qualification and pay in full before January 1, 2015 you will receive an approximately 30% discount if you are an IBANZ member, taking the price to $1195.00 plus GST. Go to the website http://professionaliq.co.nz/Fin-Services-L4/10174/ to enrol or contact lesley@professionaliq.co.nz

T

he last 4 months have seen a number of our students complete their level 5 qualifications. They have done so while working and this is no mean feat. So congratulations to the following students for completing your qualification. By December a number more of you will have completed level 5. Congratulations to Kim Veldsman from Thames Valley Insurance for being our first completion of the NZ Certificate in Financial Services level 4. Congratulations also the 86 people who have completed one or more of our online short courses.

NATIONAL CERTIFICATE LEVEL 5 COMPLETIONS: Jo Claydon Alysha Mackenzie Arjun Sharma Benjamin Rickard Bernard Kane Bhaavan Sharma Brent Jaslarz Craig Pope Jenny Graham Lisa McLeod Mark Hurren Poliko Lilo Rainier Stewart Stephen Wood

Crombie Lockwood (NZ) Ltd Rothbury Group Ltd FundAGroup Insurance Brokers Limited CBA Insurances Limited Meridian General Insurance Brokers FundAGroup Insurance Brokers Limited Mortgage Link Manawatu Aon New Zealand Meridian General Insurance Brokers Meridian General Insurance Brokers Money Shop Group Ltd - Manukau Rothbury Group Ltd

www.covernotemag.co.nz

51

CONTACTS: IBANZ CORPORATE COMPANY LIST

PIQ

IBANZ BOARD

Richard Russell

Roger Abel Rothbury Group Limited PO Box 1120 Queenstown 9348 Mob: 021 332 605 roger.abel@butson.co.nz

(Chair) Branch Director, Crombie Lockwood NZ Ltd

PO Box 34, Invercargill 9840 Tel: 03 218 8994 Fax: 03 218 8996 Mob: 027 258 8433 richard.russell@crombie.co.nz Ruth Steele Brokerage Manager, Seneca Group Ltd

PO Box 305415, Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698 ruth@senecagroup.co.nz Gary Young CEO IBANZ

PO Box 7053, Wellesley Street Auckland 1141 DDI: 09 306 1734 Fax: 09 307 0960 Mob: 027 543 0650 gary@ibanz.co.nz Andrew Gunn Consultant CIFA Training Manager

Wellington Ph: 04 815 8007 andrew@ifa.org.nz Bruce Howat CEO World Skills NZ

Auckland Ph: 021 671 566 bruce@thethinkingcompany.co.nz Rod Severn

Tony Bridgman (Vice President) Executive Director Marsh Ltd PO Box 2221 Auckland 1140 Tel: 09 928 3015 Fax: 09 309 9891 Mob: 021 873 399 tony.j.bridgman@marsh.com

North Shore City 0757 Tel: 09 477 0277 Fax: 09 478 0277 Mob: 021 707 025 nick.cressey@ibi.co.nz Allan Daly Managing Director Avon Insurance Brokers PO Box 3923 Christchurch Mail Centre Christchurch 8140 Tel: 03 3710301 Fax: 03 3666589 Mob: 0275 358128 allan@avoninsurance.co.nz

David Crawford Chief Executive Officer Insurance Advisernet NZ Ltd PO Box 74557 Market Road Auckland 1051 Tel: 09 926 2062 Fax: 09 524 2226 Mob: 021 905 537 davidc@insuranceadvisernet. co.nz

Duane Duggan (President) Head of Insurance Legal Crombie Lockwood (NZ) Ltd PO Box 91747 Victoria Street West Auckland Tel: 09 3574805 Fax: 09 623 9901 Mob: 021 833 286 duane.duggan@crombielock wood.co.nz

Nick Cressey (Immediate Past President) Director Aon New Zealand PO Box 305019 Triton Plaza

Craig Buckle Willis New Zealand Ltd PO Box 369 Auckland 1140 Tel: 09 356 9368 Fax: 03 358 3343

Mob: 021 909 148 bucklec@willis.com Stuart Speirs Director Abbott Group PO Box 3086 Christchurch 8011 Tel: 03 366 7536 Fax: 03 379 5395 Mob: 021 358341 Jason Smith Managing Director Property & Commercial Insurance Brokers PO Box 4 Feilding 4740 Tel: 06 323 8820 Fax: 06 323 8872 Mob: 027 293 8724 jase@pcinsurance.co.nz Ruth Steele (Vice President) Brokerage Manager Seneca Group Ltd PO Box 305415 Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698 ruth@senecagroup.co.nz

PAA CEO

Auckland Ph: 09 600 5171 rod.severn@paa.co.nz

WANT YOUR VERY OWN COPY OF

COVERNOTE?

STAFF Gary Young CEO DDI: 09 306 1734 Fax: 09 307 0960 Mob: 027 543 0650 gary@ibanz.co.nz Robyn Gosden Finance & Office Manager DDI: 09 306 1733 Mob: 027 275 2477 robyn@ibanz.co.nz Karen Scard Membership & Secretarial Support DDI: 09 306 1738 Fax: 09 307 0960 karen@ibanz.co.nz Steve Wardley Technical Support DDI: 09 306 1736 Fax: 09 307 0960 steve@ibanz.co.nz 52

December 2014

Lesley Southwick Principal Professional IQ College DDI: 09 306 1735 Fax: 09 307 0960 Mob: 027 459 9804 lesley@professionaliq.co.nz

IBANZ Physical address: Level Five, 280 Queen Street, Auckland 1010 Mailing address: PO Box 7053, Wellesley Street, Auckland 1141 Toll free: 0800 306 173 Website: www.ibanz.co.nz

Each issue of CoverNote is packed with vital information, news, commentry and advise for the insurance industry from experts within the industry. To keep abreast with all the issues affecting New Zealand’s insurance broking industry just email robyn@ibanz.co.nz REVIEW OF FINA

NCIAL ADVISOR

TO ADVERTISE...

Contact Robert Johnson on: e-Mail: robert@benefitz.co.nz Phone: 09-477 4702 Mobile: 0274-970-712

December 2014

CoverNote is published quarterly

by IBANZ, the Insurance Brokers Association of New Zealand.

All correspondence should be addressed to: CoverNote, PO Box 33-1630 Takapuna, North Shore City, Auckland.

Next issue is due out: MARCH 2015

S ACT PUTS MOR

The professionals’

E PRESSURE

magazine from

ON RFA'S

IBANZ

PLAUDITS FO R INDUSTRY HEAVYWEIGH TS www.ibanz.co.nz

How business 1% betto make your ter every day

CONTACTS: IBANZ CORPORATE COMPANY LIST

IBANZ CORPORATE COMPANY LIST Abbott Group Adams Trimmer Insurance 1992 Ltd Adams Trimmer Nauman Insurance Ltd Addex Ltd Advice First Limited Affiliated Insurance Brokers Ltd AJIB Insurance Brokers Ltd Albany Insurance Services Ltd Allfinanz Risk (T/A CFS RIsk Services Ltd) Andrew Scragg & Associates AMP Services (NZ) Ltd Aon New Zealand Apex General Ltd API Insurance Ascot Insurance Brokers Ltd Atlas Insurance Brokers Ltd Austinsure Ltd Avon Insurance Brokers Baileys Insurance Brokers Ltd Barley Insurances Limited Bay Insurance Brokers Ltd Benson Insurance Brokers Ltd Benton & Power Ltd Bill Boyd & Associates Ltd Boston Marks Group Ltd Bridges Insurance Services Limited Broker Direct Services Ltd BrokerWeb Risk Services (Auckland) Limited BrokerWeb Risk Services (Bay of Plenty) Ltd BrokerWeb Risk Services (Hawkes Bay) Ltd BrokerWeb Risk Services (Manawatu) Ltd BrokerWeb Risk Services (Northland) Ltd BrokerWeb Risk Services (Southern) Ltd Card Marketing International Ltd Cartwright General Insurance Limited CBA Insurances Limited Certus Insurance Brokers NZ Ltd Commercial & Rural Insurance Brokers Ltd Crombie Lockwood (NZ) Ltd Dawson Ins. Brokers (Whakatane) Ltd Dawson Insurance Brokers (Rotorua) Ltd Edward Ruys & Co Ltd Elders Insurance Limited Emerre & Hathaway Insurances Limited Executive Insurance Services Ltd FundAGroup Insurance Brokers Limited Future Agency Co. NZ Ltd Gary Jamieson Insurance Brokers Ltd Glenn Stone Insurance Limited Graeme England Insurance Services Ltd Grayson & Associates Ltd Gregan & Company Ltd Harden & Hart Insurances Ltd Hawke’s Bay Insurances Ltd Hazlett Rural Insurance Limited Hugh Vercoe and Associates Ltd Hurford Parker Insurance Brokers Ltd Hutchison Rodway Ltd I C Frith (NZ) Ltd i2i Insurance Brokers Ltd Ian K Everett Ltd ICIB Limited ILG Insurance Brokers Inbroke Ltd Ingerson Insurances Ltd Insite Insurance Insurance Advisernet NZ Ltd Insurance Brokers Alliance Ltd Insurance Design Insurance People (Fire & General) Limited

Christchurch Whangarei Dargaville North Shore City Wellington Wellington Lower Hutt Albany Village Lower Hutt Manukau Auckland Auckland Auckland Manukau Whangarei Christchurch North Shore City Christchurch Auckland Waitakere Tauranga Christchurch Auckland Palmerston North Auckland Hamilton Christchurch Auckland Tauranga Napier Palmerston North Kerikeri Christchurch Wellington Ashburton Tauranga Auckland Alexandra Auckland Whakatane Rotorua Hamilton NULL Gisborne Auckland Auckland Auckland Thames Waitakere Auckland Auckland Papakura Auckland Napier Christchurch Morrinsville Hastings Auckland Auckland Wellington Auckland Auckland North Shore City Auckland Wellington Pukekohe Auckland Invercargill Warkworth Auckland

JLT Holdings (NZ) Limited Auckland JRI Ltd New Plymouth Ken McNee Family Trust Christchurch Lifetime Group Ltd t/a/Lifetime Insurance Brokers Ltd Christchurch Lloyd East & Associates Insurance Brokers Ltd Auckland Lowe Schollum & Jones Ltd Hamilton Luxor Insurance Brokers Ltd Auckland MA Risk Solutions NZ Limited Auckland Mainprice King Chartered Brokers Ltd Auckland Malcolm Flowers Insurances Ltd Taupo Marsh Ltd Auckland Matt Jensen Insurance Brokers Ltd Taupo McDonald Everest Insurance Brokers Ltd New Plymouth Mike Henry Insurance Brokers Limited Auckland Montage General Insurance Ltd Auckland Multisure Ltd Auckland Nelson Bays Insurance Brokers Ltd (NIB) Nelson Neville Newcomb Insurance Brokers Ltd Auckland Nexus Insurance Brokers Ltd Auckland North Harbour Ins Services (1985) Ltd incl Northsure Group Limited Orewa Northco Insurance Brokers Ltd Masterton Northcrest Insurance Brokers Ltd Auckland Oamaru Insurance Brokers Oamaru O’Connor Warren Insurance Brokers Tauranga OFS Insurance Brokers Ltd Dunedin Omni Fire & General Ltd Auckland Paramount Insurance Agencies Ltd Auckland Paterson & Co NZ Ltd Auckland Penberthy Insurance Ltd Auckland Peter C Cranshaw Insurance Broker Ltd Levin PIC Insurance Brokers Ltd Manukau Primesure Brokers Ltd Auckland Property and Commercial Insurance Brokers Feilding Protekt Insurance Brokers 2008 Ltd Auckland Provincial Insurance Brokers Limited Masterton PSC Connect NZ Limited Auckland Pulsar Insurance Agency Auckland R.U. Covered Ltd Auckland Reid Manson Ltd Timaru River City Insurance Brokers 2000 Ltd Wanganui RMA General Ltd Warkworth Rosser Underwriting Ltd Waipukurau Rothbury Group Ltd Auckland Runacres & Asssociates Limited Christchurch Seneca Insurance Brokers Ltd Auckland Sit & Blake Limited Auckland Smith Pitman Insurances Ltd Wellington South Pacific Insurance Brokers Ltd Auckland Sweeney Townsend & Associates Ltd Rotorua Thames Valley Insurance Ltd Thames The Insurance Brokers Ltd Auckland The Stoneman Group Wanganui Thorner General Insurances Ltd Upper Hutt Towes Insurance Brokers Ltd Te Aroha Trevor Strong Ins Ltd Auckland Vision Insurance (S.I.) Ltd Ashburton Waikato Insurance Brokers Limited Hamilton Wallace McLean Ltd Auckland Wanganui Insurance Brokers Ltd Wanganui Wholesale Insurance Brokers Ltd Papakura Willis New Zealand Ltd Auckland Yesberg Insurance Services Ltd Christchurch

www.covernotemag.co.nz

53

OUR POLICYHOLDERS ARE ANYTHING BUT RUN-OF-THE-MILL.

Our customers own unique, classic or prestige cars, motorcycles or travel in homes on wheels. They don’t fit neatly in a box which is why we don’t offer run-of-the-mill policies.

Your customers will feel appreciated with customised policies that tick all their boxes. And you’ll appreciate our high performance team who are super-fast and easy to deal with. That’s because we have no apron strings.

We’re fully autonomous in our no-fuss dealings with you. We write our own specialised, custom policies and terms, calculate rates, communicate one-on-one with you and pay claims quick-smart; all with a smile.

Call us for a friendly chat about quality, customised insurance you can trust.

Call us on 09 250 6009 or email admin@sual.co.nz

sual.co.nz